Even the dishonest shitbirds on Fox News had to take a beat to digest this lousy number:
DUN-DUN-DUN — Maria Bartiromo and company react with stunned silence to a “disappointing” jobs report showing only 73,000 jobs were created in July
— Aaron Rupar (@atrupar.com) August 1, 2025 at 8:35 AM
Don’t worry — they quickly pivoted to a not-Trump culprit: Fed Chairman Jerome Powell. Looks like Trump may get his wish and drive the Epstein scandal out of the daily news cycle by, um, crashing the economy.
I’m no economist (and am in fact barely numerate). But I suspect the problem with the economy is that a sundowning old coot is unilaterally and illegally threatening, applying, retracting and reapplying tariffs.
Businesses find it hard to plan in this environment, so they curtail hiring, which suppresses wage growth. Already-strapped consumers are dealing with rising prices because sellers pass the tariff tax on to buyers. Maybe it’s that simple?
Open thread.
Jeffro
(Narrator: it is indeed that simple.)
Oh well, it’s only hurting the little people for now.
BretH
He’s really that simple.
Steve LaBonne
Voters are noticing.
Ksmiami
Good. Republicans need to be handed their asses. Seriously. Yes there will be short term pain and it sucks but it’s all the GOP’s fault. Make it hurt them the most
rk
There’s a saying where I come from which roughly translates into : some ghosts only respond to kicks, not words”. This applies to all the people who voted for this, all the ones who stayed home and everyone who didn’t care. Round one with covid wasn’t enough, his hateful behavior wasn’t enough. Let’s see if this round of kicks is going to result in some learning.
Mathguy
Paul Krugman said exactly what you said—it’s all about the unstable moron’s whims creating so much uncertainty.
comrade scotts agenda of rage
@Steve LaBonne:
I bet unemployed voters are really noticing.
FYI, there’s a really good diary up at Daily Kos on how the jerbs report is produced:
dailykos.com/story/2025/8/1/2336245/-Are-Job-Numbers-Rigged-The-Boring-Truth-About-Employment-Revisi…
matt
Not just the tariffs – also the DOGE layoffs processing through the economy, and the ICE deportations, and the grant money shutoffs. All of these things are providing negative shocks to various parts of the economy. The Big Beautiful Bill will also pull in a negative direction.
rikyrah
Jaime Harrison
@harrisonjaime
I’m sick and tired of some of these so-called “journalists” with their lazy takes — trying to define Democratic leaders and our party without ever leaving their beltway bubble. They did it to Hillary, Joe Biden, Kamala Harris and are salivating to do the same to our candidates in 2026 and 2028!
I’m not staying silent. We can’t stay silent. It’s time to call their asses out.
Last edited
7:16 PM · Jul 31, 2025
x.com/harrisonjaime/status/1951074453309325606
Kosh III
I’d gladly see all the tiny-dick rednecks and cultists suffer big time but sadly decent people like me who lives in a Theocrat state will also be hurt.
Buttigieg/AOC 2028
Dolly/Reba 20280
Anyone but Harris 2028
bbleh
Also, too, businesses are curtailing hiring AND investment, and consumers curtailing spending, because interest rates are still (properly) not falling, due to both the inflationary effects of tariffs and the continued uncertainty (I think a better term at this point is “brittleness”) of the economy generally. So we end up with the worst of both worlds, ie “stagflation” (although it’s pretty mild by historical standards), and it almost certainly (imo) is going to get somewhat deeper: hiring will flatten further &/or turn negative, consumer spending will continue to contract, interest rates will be reduced, but inflation won’t come down as fast as it would otherwise (if at all). And that’s assuming there’s not some additional nasty shock, eg an international incident like a dirty bomb going off in Israel or Iran deciding to blow up a tanker or something, or the Orange Guy doing something else really dumb either economically or militarily. And as usual, it’ll hit marginalized and lower-income families hardest.
Thanks again, Republicans! You really know how to run an economy like a (Trump) business!
matt
@bbleh: They’re running the US like a small family business, with all the insane nepotism, borderline illegal treatment of employees, and low quality management decision making that implies.
stacib
Open thread – a question to the jackals. My job requires signing off on a document that relinquishes your rights to any photos taken that captures your image FOR LIFE – even when you’re no longer employed here. As an employee, you have no rights on taking the pictures or the publication of those photos. I want to fight this one. I think every adult should all have total autonomy over what happens to you, your images, whatever. I’m truly struggling with the language in this document assigning ownership of any part of me to somebody else. Does anybody get where I’m coming from, and would you do it?
Betty Cracker
Lawyers of BJ, any chance that the courts will move to save the U.S. economy by taking away Trump’s magic tariffs wand? From what I understand, the government fared poorly in arguments before the federal appeals court yesterday.
rikyrah
Mohamed A. El-Erian
@elerianm
When viewed in its entirety, the monthly US jobs report was weaker than expected. Specifically, … While the unemployment rate (4.2%) and monthly wage growth (0.3%) met consensus expectations, the economy added only 73,000 jobs, missing the forecast of some 100,000. Also, job creation for the prior two months was revised down by a total of 258,000. Labor force participation also ticked down, from 62.3% to 62.2%. #economy #jobs #employment #unemployment #wages
7:48 AM · Aug 1, 2025
·
46.6K
Views
Steve LaBonne
@matt: In other words, like the Trump Organization.
rikyrah
David Sommers
@dgsommersmkts
Yes, plus now with revisions, the all-important manufacturing sector has *lost* 26,000 jobs in June and July. This is certainly not the direction we wanted to go in rebuilding American manufacturing.
matt
@Steve LaBonne: Sadly, the Trump Org. is really towards the high end of outcomes for that kind of business. Mostly they tend to stagnate or lose money.
mrmoshpotato
@rikyrah: I wonder if he crossposts to his Bluesky account.
bbleh
@stacib: IANAL, but assuming you’re not being hired for the purpose of using your image, eg as a model, then I’d just quietly scratch it out in the contract and see if somebody complains. I did that with some onerous IP provision years ago, and management complained, but I stuck to my guns and it slid by. (OTOH if you ARE being hired for something where selling your image is part of the job, I’d say you’re on shakier ground.)
Harrison Wesley
@rikyrah: Amen.
mrmoshpotato
@stacib: WTF?
Scout211
A new poll finds that Americans blame Trump for the high cost of living.
*Note: The Century Foundation, who conducted the poll, is described as a “progressive think tank” but I don’t care. The poll is being discussed in the news, so it’s news!
SW
They and their media fluffers have been touting the fact that the economy seemed to be chugging along for months after El Douche started on his mad king schtick. But what it really proved was that the Biden economy was actually very strong, strong enough to keep on chugging Wiley Coyote like after doofus ran us over the cliff. But we have seen enough of this cartoon to know how it ends.
prostratedragon
@stacib: Oh does that ever sound familiar — epigenetic memory, maybe. As to whether I’d do it, probably not but all the factors would have to be considered. Do you know a lawyer?
Fair Economist
@stacib: That sounds unethical and unacceptable to me. They could charge your friends’ social media with copyright violation 30 years from now.
Smiling Happy Guy (aka boatboy_srq)
Don’t forget all the federal spending FFOTUS keeps trying to not spend. All the funds withheld, grants canceled, budget rescissions, all additional up to less capital in the marketplace.
Harrison Wesley
It’s all Jerome Powell’s fault. You know, the Fed guy appointed by Obama. Or was it by Biden…..
Fair Economist
@bbleh: Even if you’re being hired for your image, I can’t see any excuse for lifetime control over your image. Lifetime control over *all* pictures of you would require at the very least a lifetime retainer.
mappy!
The Taco Toppings and responsible, adult (/sarc) Media is looking for anything to drive the Epstein saga out of sight and mind, that’s a given I’d say.
I noticed yesterday that one of the staple yogurt four-packs is now $7.29. Was $5.89 or such a couple of weeks ago. Maybe that was last week. Last month? The paycheck-to-paycheck crowd in Iowa is going to love Taco’s new trickle-on, pile-on, ride the tariff’s to new profit highs economy. Well, for the R business owners I guess.
stacib
@bbleh: I’ve been working here nine years. This is new and was added to our mandatory training courses.
Harrison Wesley
For those fretting about the high price of beef, RFK Jr advises that roadkill is both cheaper and healthier.
Scout211
I interrupt this discussion of the economy to drop an Epstein update:
Epstein accomplice Ghislaine Maxwell quietly moved out of Florida federal prison
stacib
From the document:
You release (company name) and its directors, officers, agents, and employees from all claims,
judgments, fees, damages, or actions of any kind on account of such use, including, without
limitation, any claim for royalties or additional compensation related to such use. You waive
and release your rights, if any, that you may have in any photographs or audio/video
recordings that may be used and agree that all such material is exclusively owned by (company name).
Chetan Murthy
At first I thought “ho-hum, what’s new? copyright is forever basically”. But then I thought again: are you saying that they are asserting that you relinquish ownership of all photos of your image forever and ever? B/c that’s different from relinquishing ownership of all photos of of your image, taken by your employer whlie you work for them.
The former …. well, sure, it’s normal, b/c copyright is forever. But the latter, that’s …. insane, and I sure wouldn’t agree to that. Anything with unlimited-time residuals, I’d require a massive compensating payment — like, $millions at least. For example, employers will try to say that you learned some skill or some tech in their employ, and therefore you canot use that tech/skill in later employment for competitors. Forever. But that never sticks, and typically the most they can get is for some time-period: maybe six months, maybe two years. But certainly not more than a couple of years.
Can I ask: what -sort- of job is this? In what sector? Is your image an integral part of the job? Maybe this is just some lawyer gone (30-50) hog(s)-wild? B/c if so, then as @bbleh: suggests, just scratch it out of the contract, and they’ll probably quietly acquiesce. B/c often lawyers …. well, they’ll just try to get the most they can get.
Mr. Bemused Senior
@stacib: [obligatory IANAL disclaimer] what are these photographs, audio/video recordings, etc.? Is getting your image recorded part of your job? Are these Zoom meeting recordings, for example?
JiveTurkin
Just saw this little tidbit from the release, May and June were reduced by a total of 258,000!
Revisions for May and June were larger than normal. The change in total nonfarm payroll employment
for May was revised down by 125,000, from +144,000 to +19,000, and the change for June was revised
down by 133,000, from +147,000 to +14,000. With these revisions, employment in May and June
combined is 258,000 lower than previously reported. (Monthly revisions result from additional
reports received from businesses and government agencies since the last published estimates and
from the recalculation of seasonal factors.)
Mr. Bemused Senior
Yes, that happens sometimes.
RevRick
@Jeffro: It’s not just that the back-and-forth about tariffs complicate business decisions. It’s also that tariffs hit the bottom 50% hardest, because most of their spending is for goods, not services. They have less money to spend. And we experienced job losses over the past three months in manufacturing, construction, warehousing, and business services. Since demand is weak, businesses won’t hire.
hueyplong
@Scout211: I’d guess that “broader sex trafficking issues” means talking about someone other than Donald Trump, probably the old “we catered to the librul elite” line the MAGAts have swallowed for years/decades.
Josie
@Scout211:
Every time we blame Trump for the economic problems, we should use this phrase or something similar, tying his name to corporate interests and/or billionaires.
schrodingers_cat
Biden economy was great and he never got much credit from it either from the left, or the media. His macroeconomic policies were Keynesian unlike the Friedmanesque POV that has dominated DC since Reagan. And yet he and Ds get called corporatist, neoliberal and other epithets by the left
The stupidity that dominates the current politics is not just on the right.
RevRick
@Harrison Wesley: Except for those that have the brain-wasting prion disease.
Chetan Murthy
@Mr. Bemused Senior: I used to say that corporate counsel exists for two reasons:
(1) to answer all requests by C-suite executives with “yes” and give them a likely pretext for why it’s legal.
(2) to answer all requests by all other employees with “no, fuck you that’s why”
I was once presented with a “bonus agreement” that (for a nice bump in my yearly bonus) required that I agree that for six months after I left the company, I could neither solicit, nor recommend, that employees of the company leave its employ for any reason. I found this unacceptable, b/c as a professional, if some -colleague- asked for my professional opinion, I should be free to give it without restraint. So that’s what I amended the contract to say. The lawyers accepted it without complaint. A colleague got the same agreement, but he amended his to say that it didn’t apply to any of his direct reports (he was expecting to become a highly-placed executive, and of course, when they move, they take their teams with them).
So yeah, lawyers will do that.
bbleh
@stacib: ok well (1) sounds like they’re not going as far as some comments suggest, ie trying to assert control over ANY image of you taken by ANYBODY at ANY time (although I agree a clarifying phrase like “any photographs or audio/video recordings taken in the course of company business …” might be useful), (2) I’d say there’s still some questions of fact, eg does your company produce training materials, for sale or for internal use, in which you appear (in which case I could see where they’d want control over that), and (3) we’re down in the weeds now and I’d definitely agree with Prostrate Dragon that you should talk to an actual lawyer about it.
RevRick
We are getting some early worrying signs of stagflation: rising inflation and a weakening job market.
Betty Cracker
@Scout211: Fascinating. I read somewhere that Maxwell was moved from wherever she was originally held to the Tallahassee fed pen as a reward for good behavior. The article described it as a much-coveted landing spot for female inmates.
Through my new conspiracy theorist goggles, I figured the Trump admin moved her to Florida because the state is under the corrupt control of Trump-branded fascists, who have their tentacles in every pie, including federal sites. But who knows?
Another Scott
@stacib: I’m a bit of a fatalist on things like this. I think our only protection these days is that millions or billions of us are in the same boat.
Given the way the LLM vendors, all the “social media” outfits, and everyone else it seems, is hoovering up every big of information they can find (stolen or not, copyrighted or not, authorized or not), your signature on a form like that probably effectively has nothing to do with future access or use of your image.
We have no control over our likenesses or any information collected by private entities about us anymore. Even information collected by the government about us that before January 20, 2025 was legally protected seemingly now can be stolen by temporary employee 20-somethings with little if any regard to the rules or regulations.
Plus, “AI” can “create” images based on us and who’s to say that it’s legally an image of us or not??
tl;dr – Pick your battles. These things won’t change as long as monsters control the government.
IANAL. Just my $0.02.
Best wishes,
Scott.
mapanghimagsik
@Steve LaBonne:
Now’s the time for some “I did that” stickers
RevRick
@schrodingers_cat: When governments invest in people, they spend their money at businesses buying goods and services. So, yeah, businesses benefit.
Harrison Wesley
@RevRick: Hey, that’s nothing a quick dip in a septic tank and a few chugs of a peptide Pepsi won’t straighten out right quick.
Omnes Omnibus
@Betty Cracker: District and Circuit courts will. The Supreme Court? Fuck if I know.
Hoodie
@Betty Cracker:
Makes you wonder if this transfer is a sort of message to her, the message being “we control your continued existence.” Trump loses leverage over Maxwell if he pardons her; she has no incentive to lie for him once she’s pardoned. Therefore, among the reasons Blanche may have went down to interview her are seeing what she knows (and maybe has corroboration evidence to support) and subtly threatening her so that she keeps quiet.
Betty Cracker
@Omnes Omnibus: My guess is the majority’s corporate sponsors will want an end to the uncertainty, but yeah, fuck if I know either
@Hoodie: Sounds plausible.
Melancholy Jaques
@rikyrah:
That’s exactly what I was objecting to in my remark about Joe Walsh in the thread below.
We are the party for ordinary average Americans – all of them. Republicans are the billionaires boys club & the racists. We have to say so over and over and stop worrying about hurting the racists’ feelings.
New Deal democrat
Responding to a few points made on this thread and the previous one:
1. A colleague who I respect has indicated “I was able to isolate the major cause of the large revisions: new seasonal factors.” In other words, post-pandemic seasonality has been tough to navigate. The BLS made some tweaks to its seasonal adjustments as a result, and this resulted in the big revisions. That does not detract from the fact that this was a very poor report.
2. This is probably not the DOGE layoffs kicking in. Severance for the people who took the buyouts won’t end until September. That’s when most of them will show up in the numbers.
3. The stock market is probably also selling off in part because of increased concern that this time Don may not TACO as to the tariffs set to take effect next week.
lowtechcyclist
Probably been said a few times already, but that was the good part.
It was the revisions of the >140K May and June numbers to practically zero that was the real kicker.
Baud
Sounds like it’s time to DOGE some folks who compile these numbers.
stacib
Thanks, folks – I appreciate the perspectives. We (the employees) don’t know how the images will be used, but for me, it’s the language of giving up any autonomy. We are pharma, so I’m assuming promotional and training material. I have four more days until I’m considered late on signing off. I get that this is a small hill to die on, but jeez, considering this last election, I’ve lost control of enough stuff already. I want to keep every single thing that belongs to me?
Melancholy Jaques
This report has the numbers, but is anyone tracking the vibes? It’s the vibes that determine election outcomes.
Hoodie
@Betty Cracker: One theory I’ve heard is that Trump may promise her a pardon when he leaves office in ’28 in exchange for keeping her mouth shut now. He’ll be in his early 80’s then and won’t care if she spills her guts after that. She’d have to trust him on that, but she really doesn’t have any better options right now – and the prison transfer tells her he controls her safety and quality of life until then.
Sure Lurkalot
An enormous bubble on the horizon. The amount of money the tech bros are spending on AI infrastructure vs. AI’s utility to actual paying customers is totally out of whack. Add to the equation that data centers do not large employ numbers, suck off astronomical amounts of resources and are terrible for the environment. Further add that one express wet dream the Mag 7 have for their AI toys is to put lots and lots of people out of work.
We have a megalomanical tech bro problem but the seemingly limitless money they have to waste is squarely due to the fact that we have refused to tax them.
taumaturgo
Checkout this new tool to review inflation of food prices in your state.
dontinflateourplates.com/
Steve LaBonne
As a preview of what Trump will do for our economy, note that Orbán’s Hungary is now the poorest country in the EU. Poorer than Albania!
BretH
Aaaand now, if you go to Fox News you need a magnifying glass to find the story on the economy, about 3 pages down.
Betty Cracker
@Sure Lurkalot: Amen to that. We’ve got to rein the tech fascists in, or we won’t have a snowball’s chance in hell of regaining our freedom. I can’t even bear to think of the power of the surveillance infrastructure Palantir is standing up right now. We’re basically in a race to put the brakes on that dystopia before it’s too late.
Hoodie
@Sure Lurkalot: Ed Zitron tends to be a bit melodramatic, but he does raise some interesting questions regarding a potential AI bubble. One of them is that NVIDIA is a significant share of market cap and a lion’s share of NVIDIA’s sales are to 4 money-losing AI customers.
I was talking to a friend who works for one of the VA utilities. He said that an inordinate amount of infrastructure is being devoted to AI data centers. This could be a massive malinvestment that will hobble their customer base for decades.
Hoodie
@Steve LaBonne: Corruption tends to do that.
TONYG
I’m certain that that’s what’s going on now. Throughout my (I.T.) “career” I’ve always been an employee, never an employer — but I know that employers are reluctant to hire people unless they can be reasonably sure of a good economy for years to come. When things are uncertain because a demented chimpanzee is driving the bus, they hold off on hiring people and seriously consider firing people. It’s Economics 101 — one of the many fields that Donald Trump is too fucking stupid to understand.
Omnes Omnibus
@Betty Cracker: Corporations want certainty. A sports metaphor actually works here. It doesn’t matter if a ref/ump calls a tight or loose game. As long as it is consistent and predictable, it works.
Deputinize America
@stacib:
I’d draw a line through it and initial the redaction.
Mr. Bemused Senior
@Hoodie: back in February Paul Krugman had a conversation with Jim Chanos (famous short seller of Enron). Chanos said this huge capital investment by AI firms reminded him of the oil fracking crash, which he pointed out was basically accounting fraud.
Will there be a return on this “investment”? Time will tell.
Anyway
Curious – Is there a drop in attendance at DisneyWorld and assorted Floriduh attractions due to reduction of overseas visitors? or was that not a large enough factor to count?
Geminid
@Sure Lurkalot: Crypto-currency could be another bubble liable to pop. I don’t know that industry very well, but I’ve seen values increase steadily during a decade-long period of economic expansion. So what happens to crypto-currency if the economy contracts?
Another question is, how intertwined are the crypto economy and the real economy? This is a problem we haven’t dealt with before and I think we can only find out the answers to these questions by experience.
Baud
Steve LaBonne
@Geminid: The Trumpers are entangling crypto with the real economy more with every day that passes, and I fear that will really come back to bite us, 2008 style.
Harrison Wesley
@Anyway: I don’t have figures at hand, but Florida normally gets a lot of Canadian vacationers. I suspect many are rerouting to Mexico.
comrade scotts agenda of rage
@Geminid:
That’s something I also wonder about.
Crypto is a scam, period. Any bubble that pops like a nasty, massive zit, would be welcome although my guess is that crypto’s turned into undiagnosed cancer on the economy and if it craters, it’ll have second and third order affects on parties that don’t deserve it.
bbleh
@Geminid: @Steve LaBonne: yeah crypto is a wild card, not least because so much of it is like a meme stock (especially the part not propped up by various black markets), but I guess I’d worry more about it as a “nasty shock” that would set off other reactions rather than as a threat to “the economy” writ large on its own, just because the ENTIRE GLOBAL crypto capitalization is estimated as less than $4T.
As to the gummint, my strong belief is that this is yet ANOTHER Trump-world scam, wherein they’re trying to use the power of the Presidency to get the government to buy large amounts of crypto, thereby driving up its value temporarily, and profiting individually in the process, ie, a larger version of their stock-market trading based on inside information of what the Orange Guy is about to pronounce that will move markets. Of course if this is right, the gummint WOULD take a bath when the various assets fall in value again, so basically it would be a huge transfer of wealth from American taxpayers to crypto speculators, but transferring wealth to preferred insiders is mostly what this administration (and indeed most Republican administrations) are about, so SSDD.
Rusty
@stacib: Unless you are a model, this is likely to cover a situation where you end up in a company promo photo, and they don’t want you coming back later if you left and complaining about it. Is this the fight you want to have? Pick your battles, if you dont want to be in a company photo just skip when thay take it. “Here is the development team having lunch at the company picnic” on the corporate Instagram account. Just step out of the picture if it bothers you that much.
WTFGhost
There’s one thing you’ve forgotten.
Trump really is dumb as a post. He really doesn’t have a plan. He thought he would push high tariffs, and people would kiss his ass and offer him bribes, but they didn’t.
If he had a plan, you could start planning to manufacture cars here, but, as it stands ,it would be better to start a manufacturing plant somewhere that the tariff costs on car parts and steel and aluminum was cheaper, like Japan, or the EU – the exact opposite of what Trump promised from a “deal”.
So, yes, businesses can’t plan, because there’s a complete effing moron in the oval, with no clue, and no desire for one, just hoping he gets do something hateful before he shits his pants next.
Now, of course, businesses know, they’ll be more burdened by costs, and less nimble, than their foreign counterparts, but, that’s okay, Trump’s “deals” might involve people like that getting bought out and laid off, because that’s what “foreign investment” looks like.
p.a.
@Mr. Bemused Senior:
@Geminid:
AI is just next-gen hi-tech/.com bubble. 85/15; 85% froth, 15% value (and I’m being generous). America has the memory capacity of a sand flea.
The view from 100,000 feet: is American capitalism sustainable without a “Soviet Union” to keep the military-industrial complex chugging along? Since 1990 it’s been “bubbles
all the waymuch of the way down.” Except maybe Joe “Too Old” Biden’s economy.Hoodie
@comrade scotts agenda of rage: I kind of view crypto and AI as a piece. Neither has yet to document a really valuable use case. Crypto is mostly useful for avoiding currency controls. Otherwise, it’s just speculation. LLM based AI is still mostly a novelty. Contrast web services. Amazon unlocked a lot of value there when they realized they could use the spare capacity of their E-commerce infrastructure to sell services to other users and thus take advantage of economies of scale. Neither crypto nor AI have shown any similar sort of value proposition. Both use very specialized sorts of computing structures that, as of now, don’t seem all that useful for other things. Therefore, it looks like you’re building this massive capacity for relatively few customers, so the cost per user won’t make sense. All these AI projects are losing money hand over fist because the investors are paying for the services. Now, maybe someone figures out how to unlock some value there, but it seems that right now they’re running purely on faith.
WTFGhost
@stacib: If you talk to HR, they’ll probably tell you that it’s your right to opt out of a group photo shoot, and, that you can request no pictures taken of yourself at work.
Without that language, if you sat for a group photo of your department, they could never republish that photo. If they capture you at work at your desk, and they aren’t sure who you are, they can’t use that photo.
Emily B.
@Sure Lurkalot: I noticed this week that Vanguard’s Total Stock Market fund is about 25 percent invested in the Magnificent Seven.
Which to my mind defeats the whole purpose of investing in an index fund.
I am reading and loving MORE EVERYTHING FOREVER by Adam Becker, which was featured in a BJ post last week. Brilliant takedown of the techbros. Highly recommend.
Harrison Wesley
But wait! There’s more! I just read at the Guardian that Trump has ordered two nuclear subs to the Russian coast in response to threats (?) Is there anything this man can’t do?
lashonharangue
The AI tech boom is very different from some of the previous ones. It is very capital intensive. The marginal cost of a new user is not zero. It is more like the boom in installing fiber in the late 90’s. However, unused fiber in the ground didn’t depreciate much until demand (social media) caught up with supply. The GPU chips they are installing will depreciate much faster as newer versions are developed. They are going to burn through a lot of capital.
JoyceH
@Hoodie: I wouldn’t put it past Trump and his cronies to believe that all they really have to do is to silence Maxwell. It’s like the victims don’t even exist in their world view. It never crosses their mind that there are scores or hundreds of victims out there who remember darn well what happened to them.
Lisa Rubin was on MSNBC yesterday and she had gone back and reread victim depositions from the Epstein and Maxwell cases. One victim was recruited when she was fourteen. Epstein took her to Mar A Lago and introduced her to Trump! Showing off his rich and famous friends. But you know, it’s standard practice when a guy gets in legal trouble with underage girls to claim “I thought she was eighteen”. That might work with a high school senior — but not with a freshman! Whether or not Trump was personally involved, he knew darn well what Epstein was doing, as far back as the ‘90s. And it was just something to smirk and joke about.
TEL
@Kosh III: Funny you didn’t say anyone but Trump, but instead focused on Harris. And by funny I mean awful.
Hoodie
@JoyceH: Thing is that Maxwell has knowledge of people associated with her and Epstein, specifically people who knew what they were doing but may not have been directly involved in the abuse. I strongly suspect Trump falls in that category.
Kosh III
@Harrison Wesley: “It’s all Jerome Powell’s fault. You know, the Fed guy appointed by Obama. Or was it by Biden…..”
Silly Wabbit-It was Clinton: Bill, HIllary, Chelsea take your pick.
Soprano2
@Scout211: I’m glad to see people are noticing this. I can rarely make it out of WalMart for less than $100 anymore, and that wasn’t true a year ago. My purchasing habits haven’t changed, it’s the prices that have.
Baud
@Baud:
And there it is.
RevRick
Totally off topic, but I want to share a letter to the editor that will be published next week.
In the early 11th century, King Cnut ruled England. Courtiers, seeking favor, told him there was nothing he couldn’t do. So, he had his throne placed at the edge of the sea and commanded the tides to stop. Inevitably, his feet and legs got wet. Cnut showed his courtiers that even kings aren’t in charge of everything.
Lee Zeldin, head of the EPA, taking a cue from President Trump, evidently believes that he can stop greenhouse gases from having a terrible impact on our planet, simply by his command. Throwing away 129 years of scientific evidence, Zeldin declared it “the Holy Grail of climate change religion.” But belief has nothing to do with science. Facts are not subject to our opinions. What Zeldin is saying is that he doesn’t care about evidence. This administration has made it clear that they are all in on burning fossil fuels no matter what the consequences for our children and grandchildren. It’s greed, pure and simple. Their agenda is give me what I want now, and the future be damned.
It’s insane. And it will lead to untold suffering around the world.
Mr. Bemused Senior
@Baud: are you going into the prediction biz or did you have a wire?
Doc Sardonic
@Harrison Wesley: Just anecdata, but I live in an area that gets a lot of Canadian part time residents and visitors……not seeing Canadian license plates much, if at all.
Eunicecycle
@Baud: I just told my husband that was going to happen! I did think maybe it was someone who just said, “Fuck it, I am releasing the real numbers.”
robtrim
The Corporation for Public Broadcasting just announced that it is shutting down, laying off workers etc.
Trump, et all will bankrupt the economy and the cultural/civic life of this country. We’re Iraq under Saddam Husain and N. Korea under Kim Jung dick-face. Everything will be named after all the Trump-kins. Mexico and Canada will be air-dropping food and medical supplies into the U.S. to prevent our population from sneaking over their borders.
Enough.
Geminid
@Hoodie: Xeni Jardin met and socialized with Epstein at several Edge foundation* events organized by John Brockman and funded by Jeffrey Epstein. She was a well-known “tech culture” journalist and quite ornamental as well.
Jardin described three circles. The first was those who participated on Epstein’s corrupt and criminal activities. The second were those who knew but associated with him anyway.
Jardin said she was in a third circle– those who did not know he was dirty but helped enable him snd those in the first two circles.
* John Brockman is a “futurist” well known in countercultural circles since the 1970s. His Edge Organization was/is intended to bring together forward looking, cutting edge thinkers and actors. From what Jardin said, Epstein used Brockman to meet and schmooze with tech titans. This was in the the period 2010-2018, after his sweetheart deal in Florida.
Jardin posted a lot about Epstein and Maxwell on social media. She had a pretty reach too, with a quarter million Twitter followers. Then in Fall of 2023, when Elon Musk was about to take control of Twitter, she left the platform and deleted all her posts. Jardin knew Musk too.
Betty
@Betty Cracker: They need to issue their decision ASAP. Of course, it will be appealed.
Gin & Tonic
@Chetan Murthy:
I’m so old I can remember when it wasn’t.
There’s some ancient, once-relevant piece of paper that said “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” [Emphasis added.]
Baud
Eyeroller
@Hoodie: Currently there is a rather frantic effort to try to refactor scientific programs that don’t really fit well in the GPU programming model, simply because that’s the only hardware anybody wants to buy anymore. It’s why Intel said they were “defeated” (effectively)–it’s like nobody wants CPUs anymore even though NVIDIA has not quite yet successfuly gotten rid of them and every computer/server still needs them.
There are plenty of well-definied fields where well-trained machine-learning models are doing a great job with data analysis and assimilation. Those are not LLMs. But now everything is bing forced into the Cinderella’s slipper of the LLM.
TONYG
@matt: Yes. And I think that the red states are being/will be hurt worse than the blue ones. There are two reasons for that: 1) Blue states have a better educated population than the red ones and are therefore more prosperous. Educated young people (in particular educated young women) in red states have a tendency to get the fuck out of their shit-holes when they have a chance to do so. 2) Blue states have a political culture in which the state governments invest in infrastructure and provide assistance to the poor. The red states do not. Will the fucking morons in the red states learn anything? We’ll see.
princess leia
Did someone just lift Maxwell’s sex offender status and move her to a minimum security facility? And why, oh, why would they do that???????
robtrim
@Baud: Trump just fired the Head of the Bureau of Labor Statistics (BLS) which reports Job numbers every month.
Steve LaBonne
@Harrison Wesley: Well, I guess a nuclear war is one way to end our misery. I really would prefer the giant meteor, though.
Scout211
The latest news drop on the Epstein files:
Not a shock that the worker bees at DOJ were in protection mode for their boss, but releasing the files now with all the names blacked out? Seems like that would just show that it cannot be proven that Trump was involved.
Maybe we can get the MAGA hoards to believe that the DOJ under Trump is concealing evidence of the all pedo crimes of Democrats?
Jason Leopold? Wasn’t he discredited in the past?
Omnes Omnibus
@robtrim: That is one possibility. Or we could do something about it.
robtrim
@Omnes Omnibus: As I just posted, Trump has fired the head of the BLS. What do you think that means?
Harrison Wesley
@Steve LaBonne: After seeing it, I’m kinda intrigued by the ending of The Last Of Chuck. If we’re going apocalyptic, let’s go all the way.
Marc
@stacib:
IANAL, but I’ve had to sign these quite a bit along with intellectual property agreements. As others have suggested, this is about incidental use of images/video of you taken on company premises, and other such things. You are basically giving up your rights to sue them for not scrubbing everything with you in it after you leave the company. Apparently someone managed to win a substantial judgement that way, but, as usual, the situation was probably rather extreme.
Archon
All this is REALLY approaching 1984 levels.
Baud
Marc
@Eyeroller: Heck, ML doesn’t fit the GPU model all that well, but that’s what is available for the moment.
Steve LaBonne
@Harrison Wesley: Obligatory.
Eolirin
@Hoodie: AI is not the same as Crypto. LLMs are definitely overhyped, and there’s absolutely excessive capital investment going on with the hope that they’ll find a way to make money at some point, but LLMs are a technique not an end point, and it’s very easy to see uses for AI broadly, and even what LLMs are trying to do would be useful if they could do it better than they do, at lower costs.
Crypto does not have any use cases, even if it could be made to work better, that aren’t scams, money laundering or blackmarket trade of illegal goods. None. It exists solely to facilitate illegal activity and that’s it. It cannot, by nature of how it works, do anything but that.
Tazj
When you’ve lost Chuck Todd
”It’s going to be hard to trust any data from the government going forward.”
”The biggest sin one can make in the Trump administration is telling the truth.”
New Deal democrat
@robtrim:
@Omnes Omnibus:
The reaction among financial and economic writers is already uniformly awful.
this is the economic equivalent of shutting down the CDC as to medicine.
Here are just two examples, by Prof. Jason Furman of Harvard:
bsky.app/profile/jasonfurman.bsky.social
“This is awful. Reliable economic data is a key strength of the US economy. When Argentina and Greece faked economic data it contributed to major crises. I don’t think Trump will be able to fake the data given the procedures. But there is now a risk plus an awful appearance.”
And via Carl Quintanilla:
RENMAC: “This is the same BLS that published the inflation reports earlier in the year that the administration touted. This is the same BLS that published the rise in motor vehicle manufacturing employment that the administration touted with a ‘see! it’s already working!’”
And
”it is not just the BLS that is reporting weaker labor markets; private surveys confirm this insight too. We just had a really weak ISM manufacturing employment index. Is President Trump going to fire the head of the Conference Board with the Labor Differential at lows?”
The only silver lining I can see is that the financial press has good enough relations with the statisticians “in the trenches” that as soon as T—-p’s lickspittle starts to mess with the numbers, that fact will be leaked. And everyone will know to stop trusting the numbers.
Also, as noted in the quote above, there are other, private sources against which fudged federal data can be checked.
But this is very bad. He couldn’t even restrain himself for *one day* after the messenger reported bad news.
Shalimar
@Josie: I like the phrase “Trump and all the other billionaires”. Trump loves being recognized for having more wealth than he actually does. Put him on a par with Musk, Bezos, and the other ultra-rich dudes and maybe he might even take credit for the terrible economy while talking about how incredibly wealthy he is.
Eyeroller
@Marc: I think there are some FPGAs for this type of purpose but commodity GPUs are easier to obtain and run at scale. But FPGAs would ameliorate some of the power and water issues.
I still don’t understand why so many water-cooled data centers apparently don’t use closed-loop cooling. Cheap water, I suppose.
Of course quantum computing has been the next great thing for a decade or so.
Marc
This differs only in the magnitude of the capital involved (a lot of people made a lot of money during the 90s). The VC firms are now very adept at inflating valuations by doing things like funding startups with the express purpose of generating a revenue stream for one of their other investments. Arrange things properly, and you end up with a seemingly perpetual valuation generating engine, where you to dump your investments off on the rubes (or one of the Magnificent 7, different sort of rubes) at inflated prices just before they collapse for lack of plausible profitability.
robtrim
@New Deal democrat: I don’t want to be overdramatic, but messing with economic numbers and the federal agencies that produce them would be about the same as the Reichstag Fire. A signal that no part of the government is immune from authoritarian attack.
satby
@Rusty: I agree, this is probably the purpose. They don’t want to have to revise promotional materials (internal or external) every time someone leaves. It’s just boilerplate to cover that, basically like a model release in advance since they don’t know who’ll end up in training or corporate meeting pictures.
Sister Machine Gun of Quiet Harmony
@Hoodie: Yeah, that’s not completely true. The viable use case for Crypto is crime, especially financial crime.
The viable use cases for LLMs involve the use of non-structured data. That means text data, which requires a lot of hours for humans to find information. So with LLMs, you can take millions of pages of text data and find, extract, summarize, etc information from those pages. It is very, very useful and can be used some tools that drive impressive productivity gains. It is here to stay.
PatD
@schrodingers_cat: if anything, Biden didn’t get enough credit for his economy from the center. All the mainstream media organizations were negative throughout his term. The political effect likely caused a good number of minority voters (not particularly left leaning) to sit out the election in urban areas.
Martin
@Eolirin: You’re overlooking that even as a technique, a business model needs to be created that can pay for this, and so far none has been established. None of the customers of this AI boom are getting a return on investment. A lot of capital is flowing in and very little revenue is flowing out. It’s FOMO all the way down.
We saw this with autonomous cars a decade ago. Waymo is the only player really in that space, they’ve been at it 20 years, had about $40B invested into best anyone can guess, and made $0. Analysts estimate that they might start making money by 2030. I’m not holding my breath.
Princess
@Scout211: wasn’t the point of releasing the Epstein files from maga’s point of view to make those involved with Epstein accountable? How does redacting names do that? They want the list, the names.
Nettoyeur
@Harrison Wesley: Appointed by Trump
Harrison Wesley
@Steve LaBonne: RIP,Tom
New Deal democrat
@robtrim:
Unfortuantely, I don’t think you are being overdramatic. I think you are correct.
Bill Arnold
@p.a.:
For some of the people involved, its basically a wager that they will succeed in creating the first Machine God (i.e. a machine superintelligence with an IQ > 1000, that self-improves), that is their Slave, and that they will then Win Everything.
Sort of Pascal’s Wager, but with a bootstrapped slaved (they hope slaved) godlike entity.
If a fascist machine god is being bootstrapped, it will need to be nuked from orbit, or equivalent.
Martin
@Sister Machine Gun of Quiet Harmony: The viable use case of crypto now is to get ROIs high enough to allow them to afford housing. Even the S&P 500 is struggling to generate returns high enough to keep up with housing prices in some markets. If you’re trying to save for a downpayment, there are VERY few places left that you can put your money that will appreciate in value faster than housing. If you’re putting your downpayment money in a CD or a money market you’re getting further from a downpayment, not closer. If you put it in the S&P500, you’re maybe getting a little bit ahead. If you put it in crypto, especially if you are doing memecoins, you can actually get ahead fairly quickly. It’s pretty risky, but since 2022 the majority of people outside the housing market are merely trying to push homelessness farther into the future. Very few have any path to buying a home, and rents have been rising faster than wages for the last 5 years.
This is why Trump has pushed to allow people to list crypto as an asset for a mortgage application so they don’t have to sell it first to qualify. It’s a stopgap move to loosen up the housing market which is in a pretty dire state and has been for the last 3 years. It’s also a bit of a doomsday device because it’s shit like this which caused the global financial crisis.
lowtechcyclist
@New Deal democrat:
Very bad indeed.
Been joking about ‘banana Republicans’ for years, but they’ve earned it in 2025. And then some.
Soprano2
I don’t know if anyone else has seen this story from WaPo yet, but the pets of immigrants are yet another casualty of FFOTUS’ ramping up of arrests and deportations. Here’s a gift link.
Pets are being abandoned, surrendered amid Trump’s immigration crackdown
The heightened need is colliding with a shelter system already stretched thin by post-pandemic overcrowding, chronic staffing shortages and plummeting adoptions.
Martin
@PatD: This is incorrect. The fundamental problem is that affordability never got addressed after the American Rescue Plan ended. Democrats failed to pass a minimum wage increase. All other economic benefits were geared toward assets, not wages. Rent has easily outstripped wages for the last 5 years, housing prices are going up even faster, most people who don’t own a house are at this point simply counting the days to homelessness. That has been true since 2022.
For homeowners, the economy has been legitimately great – still is. For renters, it’s a disaster. There’s a glimmer of hope for high wage earners not in housing – new college grads, for instance – that they can either raise their pay fast enough through job opportunities or through other investments (like crypto as I noted above) to afford a house, but all other wage earners if they didn’t buy a house 10-20 years ago, they’re completely fucked. No hope whatsoever short of wining the lottery.
Janus Daniels
@stacib: legality questionable; talk to a lawyer.
p.a.
@lowtechcyclist: banana republic with the best killing-machine military maybe ever. When reality swamps his fraud lackeys and their econ numbers, well look out *spins the pointer on “Wheel of Enemy Nations”
Bill Arnold
@RevRick:
Good rant.
Lee Zeldin is on track to having a 9 figure body count.
Musk is only 8 figures. USAID, and breaking other parts of the USA.
RFKJr is only 7 figures, unless there is a deadly global pandemic , or he blocks research that would have found a cure for cancer, or 3 score and 10 mortality, or similar.
Trump could beat them all, but mainly because he controls The Button, with which he could trivially achieve 10 figures.
Another Scott
@Martin:
As of today, Google tells me the S&P500 is up 14.53% over the last 12 months.
If I did the math right, FRED says Rent of Primary Residence – US City Average is up 3.8% in the last year.
FWIW.
Best wishes,
Scott.
comrade scotts agenda of rage
@PatD:
Bingo!
Hoodie
@Sister Machine Gun of Quiet Harmony: No one is making any money on that. Those use cases tend to be very specialized and probably can’t be marketed to the entire planet. They don’t need massive data centers that allow folks like OpenAI to scale up in pursuit of Bezos-like fortunes. But that is what a lot of this investment is betting on and it’s distorting capital and infrastructure spending. Hell, blockchain has some legit use cases, but crypto overshadowed everything because the scammers could make money by turning it into a Ponzi scheme.
Martin
@RevRick: Unemployment has been rising since 2022 since rates first started going up. Wage growth has also been in steady decline since 2022 with higher wage earners doing much better than lower wage earners. That’s unusual – normally it’s the other way around but since late 2023 or so that inverted and lower wage earners have really been getting hammered.
The effect of tariffs has taken labor markets like you note that had been doing pretty well and flipped them around so they’re now weak like retail, etc. had been. Construction should be strong but immigration raids have screwed that up. Ag has similarly gotten worse. Whatever had been weak under Biden is still weak and what had been strong Trump made weak.
Hoodie
@Martin: Home sales seem to be cooling off here (Research Triangle). Anecdotally, our neighborhood (a relatively desirable in-town location) had extremely very low inventories and skyrocketing prices during the last couple years under Biden, but now there is a lot of stuff on the market and it isn’t moving very quickly. There is still some infill construction going on, but I think that stuff tends to lag because it was already in the pipeline. Prices have held up but appreciation has basically stopped.
comrade scotts agenda of rage
>Putting on tinfoil hat<
AI, Big Tech Data Centers and crypto are counting on cheap electricity and cheap water to operate effectively.
As somebody’s pointed out earlier, look at TX where M$ is potentially getting what it needs over actual residents when it comes to water. It’ll be no different with electrons.
Where’s it gonna come from?
Utility companies of all kinds can’t keep up with the demand at present, particularly as they look to diversify and expand renewables. When they can’t, the alternative will be to keep all those fossil fuel plants going, that’s been a fact of life for several years now and when one points that out to the Electricity Uber Alles crowd who thinks electrifying everything is *the* way forward but refuse to acknowledge the sad realities of what it currently takes to do that, the conversation peters out.
Renewable conversion isn’t helped by corporate and corporate utility push back:
utilitydive.com/news/energy-abundance-scarcity-utilities-pjm/754171/
Soooo, who benefits from this hyper-increased electricity demand? Fossil fuel companies! It would be irresponsible not to speculate on their relationship with AI, Big Tech and crypto.
>Taking off tinfoil hat<
Hoodie
@comrade scotts agenda of rage: I just shake my head at the thought of burning coal to power fucking AI data centers.
Bill Arnold
This guard rail was removed in February.
Federal Economic Statistics Advisory Committee
Martin
@Another Scott: In my county, in 2020 the median household earned $94K – that’s a $2450/month mortgage (30%). Median home prices at the time were $850K, and you’d need a $270K down payment (31%) to get a $2450 mortgage payment at 3% interest. Fast forward to 2025, the median income is up to $110K, so a $2750/mo payment, the median home price is $1.3M. You now need an $880K downpayment (67%) to have a $2750/mo mortgage at 6.725%.
So, in that time if you had saved the $270K for the downpayment (meaning you could just afford the median home), continued to put aside 5% of your gross income to downpayment (note, rents are rising relative to wages during this time so that’s getting harder) you would have needed a 22% compounded interest rate (daily) in order to afford a house in 2025. If you had your downpayment money in the S&P 500, you’d be $300K farther from homeownership today than you were in 2020 when you technically had the downpayment and income to buy.
Now, we’re a particularly hot market, but 14% is a lot closer to the mark for the nation. If you think the economy has been good the last 3 years, you either own a house or have an investment portfolio or both. If you have neither, you wouldn’t think that. Every single person talking about how the Biden economy was good is taking from a position of privileged. I made just shy of a million dollars in the 6 months prior to the election, and I’m retired. That economy was fucking GREAT for me. In 2024 rents went up nationally around 4%, wages went up about 3%. You think renters felt like they were getting ahead?
SW
So if Trump manages to strong arm the Fed into lowering interest rates it will just turbo charge inflation and Jack up already ridiculous housing prices. Fuckin moron.
laura
I commented on Betty Cracker’s earlier thread, but it got eaten, so here goes again; I came back from San Francisco to Sacramento yesterday and I was stunned by the absolute absence of shipping activity on the bay. Usually it is bustling, but the only traffic was the ferry system. I counted about five ships total on the bay. The Port of Oakland was a ghost town. All but two bays were empty, and the two that had shipping containers to offload were not full. Not one tractor trailer seen entering or exiting the Port. there is no economic activity on the northern shipping port. Zero. This cannot be good news. What goods will be missing from shelves once inventories are depleted? Who will shite-bag blame that on?
Harrison Wesley
@Soprano2: Kristi Noem will get right on it. She has experience in this area…..
Martin
@Hoodie: Yeah, the housing market is in a really, really weird state. Nobody has seen anything quite like it before. Housing prices are going up while sales are going down. And mortgage sizes are going down. That’s been the trend for the last 3 years, so not only a recent thing. It was most concentrated in CA at first but it seems to becoming more widespread now.
The likely explanation is that investors are responsible for a growing share of sales, as they pay in cash (which is why mortgage sizes are going down) and are pushing prices up. The price-to-rent ratio in the US continues to be high which means that housing is so out of reach for so many renters that they can be squeezed really hard on rent (this is what the algorithmic tools make feasible), knowing that even with higher rents renters can’t afford to bail out to buying a house – particularly if investors keep driving that up. This is a way to generate a lot of income from capital (which they have more than they know what to do with) without risking that capital. People will pay anything to not be homeless, and the escape valve on rents has always been ownership, and they increasingly control access to that.
Omnes Omnibus
@Martin: I bet it’s really tough to find a cheap starter home in Greenwich, CT, as well.
Martin
@SW: Probably not. The rate/inflation relationship is causal. When inflation is caused by a hot economy (lots of money to spend by consumers) then a rise in rates helps cool that down. But the Biden inflation wasn’t caused by that – it was caused by supply chain problems. Once those problems got addressed (ports and bird flu) which was a problem for the WH and Congress to solve, not the Fed, then the inflation rate should have gone back down on its own. I mean, the ARA stimulus was running out at that time – people had less, not more money to drive inflation. Rates should have been kept low then.
The inflation fear by Powell now is similar – it’s due to tariffs, not people being flush with discretionary income. The correct solution should be the WH/Congress not pulling the rates lever. There’s really no reason to think that lower rates and would lead to much increased spending. Credit card default rates are climbing due to those higher rates, which depresses spending, auto defaults rates are also climbing. That’s why people are predicting stagflation – consumers have less money to spend, inflation is up due to tariffs, and there’s no way to break out of that cycle. You can push rates to 0 and that likely won’t change it. Even if the tariffs triggered a wave of domestic investment in factories, that takes a year at a minimum to pay off. And even that likely won’t work because the last 50 years has been an exercise in minimizing wages. Any factories we do build are probably going to be highly automated, with no lasting labor benefits, and therefore no real change to consumer spending.
Archon
@Martin: Maybe the next Democratic President will focus on affordability in blue cities instead of building factories and fiber optics in red state communities that wish city dwelling progressives like me dead.
Martin
@Omnes Omnibus: The same analysis applies to Arkansas. You think there’s a 3% mortgage rate fairy in Little Rock? Like I said, we’re a hot market, but the same thing is happening everywhere. Mortgage rates are national, not local. Wage growth is pretty uniform around the country.
You cut every single one of my numbers in half and you still need 22% return.
Another Scott
@Martin:
I posted a link and some numbers to counter the statement of yours that I quoted.
As you say, and as we all know, housing in California is nuts and has been for decades. I think we all know that 3% 30 year mortgages are nuts and not sustainable as well. Transitions from that to more “normal” mortgage rates cannot help but be painful.
(We had a 7% first mortgage and a 10% second mortgage when we bought our place in the late 1990s.)
Housing is a tough problem, a mixture of hyper-local circumstances (location, location, location) and national (and international) finance, business cycles and industrial transitions, and a whole bunch of other things. Susanne has talked about the lack of new builds. We’ve all seen average prices go up and up and up. Supply and demand is a heartless bastard.
But in other respects, the housing market isn’t all doom and gloom (from May 2023):
FWIW.
Best wishes,
Scott.
Martin
@Archon: I do not think there’s a mechanism in the currently accepted set of economic rules to accomplish it. The only way to close the affordability gap in any reasonable period of time (that is, the 4 years a president gets before re-election) is to deflate home prices and risk driving some subset of the housing market underwater and therefore a repeat of some degree of 2008, along with making those voters mad because their retirement nest egg is going down rather than up, along with a pretty massive uplift of wages which will have a different set of macroeconomic problems to sort out. This is why I don’t think Biden was able to solve the problem because the problem has simply gotten too big.
I think you’re looking at a wealth tax along with a MASSIVE welfare program to try and balance the ends out, along with a decoupled housing market where the government can create non-market rate housing that can be bought/rented at the cost of construction rather than the highly inflated market rates. That way you don’t have to massively deflate the current homeowners and you can start to build this second middle class and then somewhere down the road bring the two markets into some kind of parity and merge them.
These are both big-L liberal ideas that don’t have room in a neoliberal economy. There is no neoliberal solution to the current problem – we let it get too big and while you could pull neoliberal levers to reverse it, nobody will be able to stay in office long enough to ensure the other party doesn’t break it. This is why authoritarianism is growing in appeal – Obama didn’t reverse that trend, so we switched party ideas, neither did Trump, so we switched party ideas, neither did Biden, so we switched party ideas, and this will continue until there’s a big enough crash that someone can run far enough left back toward liberalism to break out or far enough right to feudalism to break out (Trump doesn’t represent an economic ideology – he’s just vibing).
Another Scott
@Another Scott:
Might have been 9% – I don’t exactly remember. Whatever it was, we paid it off as quickly as we could.
FWIW.
Best wishes,
Scott.
catclub
@mappy!:
Starting with beef prices.
sab
@stacib: I back in my grad school days I had an internship where they took my photo and included that in the annual report. I thought that was cool.
The photographer said that one of the swcretaries freaked out when he tried to take her picture because her ex didn’t know she worked there and would literally come to kill her if he found out.
Fast forward thirty years and I was in the same situation when I moved back to my hometown and my employer decided to put my photo in the local newspaper when they hired me. He wouldn’t have come to kill me but I really did not want him to know where I worked.
SW
@Martin: Good points but I don’t believe that the insane values in the housing market can be laid at the feet of tariffs. Rather I would point to years of artificially low interest rates among other forces. The average buyer only cares about the size of their monthly payments. Lower the rates and they buy more house. When the rates are pervasive and sustained prices rise to fit the payment potential. If that goes on long enough there is overshoot and if you couple that with old low interest mortgages locking in potential sellers…
The crazy housing market leaks out of housing and into other assets. Asset inflation is different than consumer price inflation. Consumer prices are much more sensitive to political pressure. People are predisposed to welcome increases in the value of their stuff. Not so much their grocery bills.
Martin
Little Rock Arkansas, 2020 Median home price in 2020 was $235K, so with a $47K downpayment (20%) you can afford to buy that home with a $40K income at 3%, which is 25% below the $54K median household at the time.
In 2025, median home price is up to $278K. That same worker at 75% of the median income is now making $45,500 and can afford a payment of $1140. They need a downpayment of $105,000 (38%) to get their monthly under $1140. Assuming they’re able to continue to save 5% of their gross toward downpayment, they need to earn 13% over those 5 years to afford the same median home in 2025 that they were just able to afford in 2020.
In 2025 to afford the median home in Little Rock with a 20% downpayment, you would need to earn the median income.
Little Rock is not in California, does not have a market that looks like California. And while the housing example above shows that in 2020 the median house was affordable to someone at 75% of the median income, by 2025 it no longer was and you’d have needed a 13% rate on your downpayment savings while continuing to save in order to get there. By 2025, you’d have needed to be making the median household wage of $61K in order to afford the median home with 20% down. So while Little Rock doesn’t have a market that is out of reach of the median wage earner, it does now have a market that is out of reach of the 75%-100% media wage earner which it didn’t have in 2020. Even in Little Rock buying a house stretched far out of reach of a lot of people who were in reach of it in 2020. Maybe OO can explain to us how Little Rock has become the Greenwich CT of the midwest with that 13% rate needed to close the 2020-2025 housing affordability gap for wage earners 25% below the median.
As to your rising home ownership rate, that not a counter to an affordability issue.
What you’re witnessing is younger and lower income wage earners not entering the housing market and wealthier and older ones either entering or staying in it. They’re using other assets to buy a house, and on the back end when we would normally see retirees downsize and maybe move into rental units, they aren’t doing that as often. A rate like a homeownership rate has two sides to in – the entry rate and the exit rate. In order for the overall rate to go up, the exit rate simply needs to be lower than the entry rate. The entry rate can still be going down for the overall rate to go up so long as the exit rate is going down faster.
sab
@Martin: Rental units are not a safe bet for renters any more. We are in our seventies and thought about moving to rental to get on one floor with no yard. But with rising rents, and REITS milking the rental market by neglecting maintenance, we thought moving to a smaller one story house made more sense. And that house should have been a starter house for a young family, but we have needs too.
ETA there is a luxury highrise that my mother dreamed of moving into. Now it has an unreliable elevator and air conditioning, people get mugged in the parking lot, and routine maintenance is non-existent. Still a fun neighborhood, but out of state bad landlord corporation is destroying what used to be prime rental.
Omnes Omnibus
@Martin: Wouldn’t first time home buyers be looking at the lower end of the price range for their starter home. Why use median price figures?
Another Scott
@Martin: Baker included the rate of home ownership for people under 35.
(As I’ve said before, my parents were around 40 when they bought their first house. We were also nearly 40 when we bought our place. A lot of the subject reporting in the Biden years seemed to be interviews with 25 year olds who were disappointed that they couldn’t be like everyone on House Hunters who could get their first $1M home before they were 30.)
Yes, buying a home now is difficult. Yes, we need rational local and state and national housing and lending and tax and non-resident ownership policies. But, …
FWIW.
Best wishes,
Scott.
Martin
@SW: No, tariffs should be orthogonal to the problem. My point was actually that the problem long predated tariffs, and even Trumps election. My point is that for non-asset holders, the Biden economy was pretty bad. And for asset holders it was pretty great.
The housing problem got exasperated when we lacked a non-fed solution to the covid recovery period of inflation, which caused Powell to pull the rate lever, and then inflation ended. But these things are not causal from what I’ve seen and what a lot of economists assert – they are coincidental. The inflation would have ended once the supply chain problems were sorted. But the higher rates had two political effects:
Tariffs are simply the same problem as the supply chain problem. It’s not consumers going crazy buying shit driving prices up, it’s tariffs artificially driving prices up even as demand is going down. But Powell is staying the course, because his goal is to keep inflation low regardless of the cause and an ever-cooling economy will do that. Part of it I think too is just a game of chicken – ‘back off of the tariffs or I’ll push us into stagflation and you’ll be blamed for it’. Trump isn’t wrong for wanting rates lowered. But note, none of these things directly address wages or affordability because the whole fucking point of neoliberalism is that the government is required to be willfully obvious to wages and affordability and if it should accidentally notice it, it is forbidden to actually directly intervene. It’s got to do all of these lever pulling minigames hoping one of them will do something that might possibly trickle down to affect wage earners and costs. And even if they do pull the right set of levers to affect, that people like me, and people richer than me, can intercept most of those benefits before they trickle down by how we make investments. We can move MUCH faster than the economy wheel can turn.
There is no immediate relationship between tariffs and housing apart from Powell holding rates high preventing mortgage rates from dropping and the downpayment to monthly relationship to relax enough for at least some buyers to enter the market. But even that is a stopgap because this is an economy designed to keep assets growing faster than wages, and no amount of Abundance policy tweaking will change that. It’s been like that for 30+ years, but now it’s hitting a breaking point for people. The whole GFC was a set of shenanigans to overcome that trend to help people afford homes they couldn’t afford until it blew up. Crypto is a modern set of shenanigans to overcome that trend until it blows up in a different way. So long as we treat homes as preferred retirement accounts or rent opportunities for capital holders and not as shelter, it’s going to keep going this way.
Martin
@sab: Oh yeah. The whole space is a shitshow. I’m not here trying to accuse anyone of wanting things to get worse, but everyone responds to the incentives that have been put before them and an economy of local positive self-interest can absolutely lead to large scale disaster.
rivers
@Emily B.: I’m reading it too. I think it’s great – it makes me understand the tech bro billionaire “visions” i.e. delusions far more clearly.
Another Scott
@Martin:
We’re 100% on the same page here. It seemed obvious to me that the pandemic-induced inflation was transitory (though the time constant of the transient was longer than I thought it would be). The fundamentals of the economy (especially world-wide over-production capacity in things like steel and autos and airplanes and appliances and …) made me think that we would be under 2% inflation in short order.
I think Powell was on that page as well, until the relentless screaming about inflation got to be too much and he had to pull the lever he had, even though it had no connection to the fundamentals of what was causing the step-change in prices….
And I still think that the long-term trend is getting back under 2% and the Fed again pushing on a string to try to control the economy and inflation (while having no direct levers to do so anymore (since so much of the financial system is outside the Fed’s control)). The Fed will claim success, the banksters will be happy with their 15-20+% margins between their costs and what normal people have to pay, and we’ll muddle along until the next crisis when everyone screams for the Fed to push harder on that string…
Of course, in the long run we’re all dead. :-/
The wildcards for me now are the tariffs and all the other stupid, dangerous, and nonsensical criming and breakage that 47 is doing.
Grr…
Thanks.
Best wishes,
Scott.
Martin
@Omnes Omnibus: Because they’re the only figures available, mainly. Income and prices are both one-sided distributions meaning that the mean should be higher than the median which should be higher than the mode. That is, the income with the most people earning it should be below the median, the home price with the most inventory should also be below the median, but the mean income and the mean price should both be higher than the median. Simply put, you are bounded to zero (you can’t earn less than $0 and a house can’t be priced lower than $0) but you have no upper bound on each and in both cases you would expect to find incomes and properties at 2x the median (putting them as far from the median as $0 is) so those above that line are pulling the mean pretty hard above the median.
So, not knowing the real distribution of incomes or housing prices, the shape of those two distributions is going to look roughly similar – hard bounded at the low end and tailing off at the high end. So if the median income can’t afford the median home, you can generalize and assume given similar distributions that the 75% earner can’t afford the 75% home. Now, if we think about income and homes a bit harder, it actually should be quite a bit worse than that because income is bounded at $0, but housing really isn’t. There are a decent number of people close to the $0 income or to some artificial number down toward that end, $0 unemployed no benefits, a not insignificant group of people between $4K and $23K which is the range for unemployment benefits in AR – so that’s around 4% of earners (note we’re using household above so these aren’t directly comparable), a pretty big group around $28K which is Social Security annual benefits, etc. But you don’t find homes for free. And you don’t find many down at 20% of median, so housing prices we would expect to distribute somewhat higher than incomes at the bottom end, which means that if anything we’d expect that as we go below the median, affordability gets worse rather than staying the same because that distribution should be tighter toward the median for home than for incomes.
Social Security is an interesting category because you wouldn’t expect any of them to be first time homebuyers but they’re still in the income distribution. But even if we could account for them, it doesn’t change the overall trend, just whether median/median is affordable or not and all trends toward or away from unaffordabilty would still hold.
The distribution for housing is also hard because developers have a lot of agency there – and anecdotally in all markets the trend is to build above the median. In a place like Arkansas you’re probably bounded by the construction costs. If you can’t acquire land and labor/materials and some reasonable profit margin for under that $289K median price, you’re not building any housing cheaper than that because you’re not going to sell at a loss so there’s no ability to pull prices down in that market by adding inventory, it can only be pulled down by removing demand. That’s another reason why CA gets so much focus – we hate demand-side solutions, and love supply side ones, and CA has supply side opportunities. I suspect Arkansas doesn’t have many. In Arkansas, you pretty much have to pay people more or reduce the population (which is what most rural communities were doing). And nobody wants to hear either of those solutions.
Martin
@Another Scott: Yeah, I think if not for tariffs there would be more appetite to lower rates. Note, Trump would then get credit for an improving economy which might help him lock in working class voters to the GOP.
So we’re cheering for poor people to suffer because it’s politically advantageous to do so. It’s not a great place for Democrats to be who lack any kind of real policy alternative. Democrats could have taken the real wins to workers from the ARA and parlayed them into a set of sustainable polices that would achieve the same goals, but with 8 senate dems voting against minimum wage increase, we weren’t even close to being able to implement anything like that. It doesn’t even matter if Biden would have floated that idea or not (and he did campaign on some aspects of it), Democrats inability to deliver would have left us in the same place. The harsh reality is that the labor class has no political party helping them and hasn’t for a long time despite Dems desperately holding onto that label. That’s why they’re ping-ponging between the GOP and Dems around unrealized promises and culture war bullshit and increasingly grabbing either the socialism (which isn’t even socialism, just good old fashioned liberalism) or fascism lever to try and reform the parties before they all wind up living under an overpass, parties who steadfastly resist the effort at every turn.
Another Scott
@Martin:
What??!!
I’m not in that group. You’ve lost me. I’m out here.
Best wishes,
Scott.
Martin
@Another Scott: We want Trump to fail – just read the thread – and he can’t fail while the working class gets better. That’s not a scenario. The only way for the working class to benefit from now to 2028 is for Trump to succeed. The economy that we swore wasn’t the key issue going into 2024 we are now admitting is the core issue going out of 2024.
Kayla Rudbek
@matt: yeah, Mr. Rudbek and I are both working for now, but with things being so damned uncertain, we aren’t taking as many trips (even weekends), we aren’t replacing furniture or appliances or doing other house repairs unless necessary or the HOA requires it, we aren’t going to concerts, we aren’t replacing either car or doing serious repairs to the cars, and I’m selling off my used clothes when I can, which I never would have done when I was younger. My extravagances are mostly crafting supplies and magazines and books, and toys/clothes for my godson. And we’re lucky because we are both working, we have no kids or pets, and our house is more than halfway paid for.
Kayla Rudbek
@stacib: the right to control how your image/pictures/likeness is used is called “right of publicity” in some US states and “right of privacy” in other areas of the world. In the USA, “right of publicity” goes state by state (there is no federal law directly applicable unless you can prove another injury/tort e.g. defamation etc).
for a list of the 30+ states that recognize a right of publicity, start here en.m.wikipedia.org/wiki/Personality_rights (scroll down to the USA section) or here: rightofpublicity.com/statutes. Check where you live and where your employer has its headquarters for what the applicable law says.
Kayla Rudbek
@stacib: and I would be the first one raising objections to this, but then again, I am a Jesuit-trained intellectual property lawyer who knows that some people can’t be trusted to even shake hands with, I know exactly what type of IP rights this could violate, and I know where to go looking for the applicable law to smack them around with (and I am a mean nasty GenXer who is always spoiling for a good fight)
Kayla Rudbek
@Betty Cracker: although that was before the Federal Circuit appeals court, and I don’t have a very good professional opinion about them for other reasons (they do all the patent lawsuit appeals and no matter what the current state of the law is, the Federal Circuit will mess it up further, and the Supreme Court rarely takes appeals from them)
Kayla Rudbek
@Sure Lurkalot: and the really stupid thing is that the AI generated material can’t be copyrighted, the AI also can’t be an inventor on a patent, and it’s fairly unlikely that the AI methods can be patented either (the Patent Office and the courts hate software patents and the legal hurdles are higher than for the hardware/machine itself) so how much money is the AI slop going to make (even before you start considering all of the copyright and trademark infringement lawsuits that are going on)? Some of these idiots are knocking off Disney’s IP, and Disney has filed a lawsuit against them…
artem1s
this is absolutely happening. they are selling to each other, acting as agents for each other, mortgaging at ever escalating prices and collecting a percentage of the sale each time. it’s a Ponzi scheme that is doomed to crash and when it does it will make 2008 look tiny in comparison. The buying groups will walk away from those mortgages and property taxes and the properties themselves. They can’t get enough rent off them to cover their escalating costs.
There isn’t a housing shortage, there are too many investors who have hundreds and sometimes thousands of home in their portfolios. No owner can compete with the cash offers they are making to each other as they pass them off to one another.