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Comment by spywaregorilla | Hacker News Reader

I think the US (and Canada) just needs to ride the tide and let all the other boats sink. Pretty much everyone else is screwed. I think people are underestimating the second order effects of the US still having stable energy and farming capabilities. We'll see more stuff get done here and less stuff done elsewhere. Unemployment will be great here no matter what we do really. It will suffer in other countries.

Though I'll admit, I still found the stat that of 20% youth unemployment in China to be shockingly high. The idea that they're lowering their interest rates is also bonkers to think about. Their economy has been slow motion train wrecking for soooo long now. God help them if they get another covid flare up over the winter and and are stupid enough to do another lockdown.

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Mexico will be fine as well.

North America is in a pretty good place compared to the rest of the world when it comes to energy/food/labor demographics.

China is, unfortunately, a long way from the competent leadership of Hu Jintao and the other previous post-Mao leaders. Unlike the previous leaders (primarily selected on merit), who WANTED to prevent another Mao-like cult of personality, Xi is a deeply-insecure man whose rise was entirely built on family connections. He has fostered a cult of personality while simultaneously using the cover of anti-corruption stings to remove all of his CCP rivals, or anyone critical of him.

The result is a huge departure from the previously competent CCP decisions. The current CCP is carrying out foolish, self-destructive, and non-sensical policies that can only make sense in the context of local decision makers desperate to please Xi. Xi is the ultimate centralizer of all decisions, having knee-capped the previous CCP policies of pushing decision making to local officials as much as possible. It's a real nightmare, and has resulted in China having an image of a shining (although somewhat authoritarian) city on a hill to a weird techno-dystopia with people starving in their apartments under absurdly stupid "Zero Covid" lockdown policies because the CCP can't admit the SinoVax is a complete failure.

China has 4x the population of the US. Abandoning zero COVID as a policy would lead to millions of deaths. How can you call SinoVax a failure when all of the non-mRNA vaccines perform similarly? The US has more COVID deaths than China has had cases. That's shameful, especially when the US sat on enough mRNA vaccines to completely immunize our population 9x over. Countries like Argentina that were guinea pigs for the Pfizer, Moderna, J&J vaccines couldn't get enough access because IP law is more important than stopping a global pandemic that disrupts manufacturing.

Countries like China and Cuba had to manufacture their own vaccines without the new mRNA process and it was less effective as a result but still better than nothing. Cuba even had to get permission from the US to import syringes to be able to administer the vaccine they manufactured. How is that defensible?

All of this without even saying that the CPC has an incredibly high approval rating (https://news.harvard.edu/gazette/story/2020/07/long-term-sur...), even when the polling is done by outside entities and anonymized. It seems incredibly condescending to treat a billion+ humans as inept drones under the iron grip of a tyrant simply because they're geopolitical rivals.

Firstly, the mRNA "vaccines" do not produce any sort of immunity. AFAIK the Chinese vaccines actually work like traditional vaccines (i.e. cowpox particles to produce smallpox immunity). We really don't know the Covid death rate in China, whether there are excess deaths from Covid infection directly or as a result of the CCP's cruel and barbaric lockdown measures, which have caused reports of starvation in places like Shanghai.

I also would not extrapolate public opinion about the CCP based on polling, even if it's done by outside entities and anonymized. Any Chinese with an IQ higher than room temperature would know better than to speak out against the CCP in a western-designed poll. Xi Jinping is leading his country like Stalin...they have GULAGs for dissenters.

So, I don't disagree with you. I just think culturally, the Chinese are rightly reticent to express any antigovernmental sentiment, for good reason. Let's remember that the Chinese people have been occupied and oppressed by the Chinese Communist Party since the Chinese civil war. I pray for their liberation.

> a billion+ humans as inept drones under the iron grip of a tyrant

Drones, no, but it's very instructive to look at what the elites of China do. Many who achieve success in China spend significant resources to have a foot out the door, because they know that success is fleeting, depending on remaining in favor of the CCP. Even Xi Jinping's daughter went to school in the US.

If the CCP is actually so benign and China is well run and a good place to be, why does that happen?

Optimization goals?

They could be targeting economic policy around the, say, 1.3 billion or so non-elites.

A few million at the top may see a net burden in "we have to be responsive to overall planning goals" and "we might have less raw economic opportunity", but maybe it's a choice the CCP is willing to make. At least on an aggregate, society-wide level, the quality-of-life metrics do seem to be pointing in the right direction.

I don't think "schooling in the US" is inherently a culpable thing. Premier American universities are globally very highly respected, and I could see value in "cross training" to make sure they're not missing any good ideas worth investigating.

"The US has more COVID deaths than China has had cases."

You really believe that? In that case I'm sure you also believe that no Uyghurs have been harmed as well.

91 percent of Chinese people have absolutely no say in their government based on statistics of membership in the CCP. Nobody is saying they are inept drones but they certainly get disappeared if they protest their government.

This is why any system of government that relies on an unbroken chain of good leaders, as opposed to limited government with systemic safeguards, is bound to fail, and often times sooner rather than later.

Question is whether the failure is worse than the increased success during the good times.

Without strong leadership, China might still be a pre-ondustrial/low-industrial poor region plagues by wars between small nations.

> I think the US (and Canada) just needs to ride the tide and let all the other boats sink.

Look at USD FX rates. The US may be able to purchase resources and goods abroad at more favorable exchange, but who can afford to buy US exports as the USD rockets skyward? And what is the logical follow-on to unobtainable USD units of trade? Substitutes that China, for example, are more than delighted to support if it means they exert (even) more control over the global monetary system.

FX rates are like racing logic. It might be better to be behind for a while (weaker currency) because that could have long term advantages like moving industry to your country. But you want to be in first place.

The USD is strong because people need to buy things from the US to begin with. That is, at best, a "nobody goes there it's too popular" kind of comment. The idea that you weaken your currency to increase exports is something you do to benefit from growth, like moving industry to China. But if something like an energy shortage or a fertilizer shortage start limiting your ability to produce things with that opportunity, you're just doubled down on a bad situation.

This isn't even a story on "reserve currency" status. This is just the US (and Canada) being in an incredible competitive situation. What do you do when there's a global food shortage and the US is the only country unhindered? You suck it up, buy those stupidly expensive US dollars, and import US food. And get screwed if you owe USD denominated debts while your currency goes down.

And if the US finds it's not at the right level, it can always just... spend more money. It's basically free. Everyone's getting hit with inflation because it's genuinely harder to make and ship things. Slapping on some excess money sloshing around to try and keep things going is dangerous.

That's why petrodollar is part of heated conversations around the world.

You do this enough and your allies become collateral damage, the system begs for a change. Rest of the world starts to only base their trades in gold (or some other standard) and when faced with USD debt, change the debt amount through policy. US has to keep their (future) allies afloat either openly or with hidden support.

All the trinkets that could be offshored were done already. What the US manufactures now is high-end (chips) or protected by tariffs (cars). A lot of virtual stuff like software and call centers. I think we've hollowed out so much there isn't really much left to offshore.

Don’t forget the US still excels at high speed pizza delivery. ;)

Odd but that Snowcrash reference seems oddly prescient given the rise of Uber, Instacart, GrubHub, etc. Not quite pizza delivery but similar genres.

If it were snowcrash, however, there'd be a lot slow-ass uber drivers bleeding out on the road.

This is the basic premise of this talk by Petar Zeihan https://www.youtube.com/watch?v=Wi_nFz1CJSI&t=2s

Pretty much. I think he's too eager to write off certain things to paint a wholly American picture, but he's generally got it right. The China story is not as clear. But the Europe picture is pretty plain. America is gonna eat it's lunch.

I'm not sure we want to (or intend to) eat Europe's lunch - we'd like a fairly strong Europe. But yeah, for now Europe's lunch will be eaten.

Yes I agree on both points

Europe missed the train and train doesn't reverse when missing the station..

Energy and infrastructure are the venes of Europe which clocked and overstretched to the max. Something will need to give and it already begins by small bakeries closing and more to follow..

It wont end well. I don't believe we will have any growth in Europe for the next 3 years.

Who is going to invest in Europe if energy is literally unpredictable and expensive?

Yeah, bakeries are energy intensive. Methane generation from sewage would be one way to (relatively quickly^) replace some of the natural gas that was coming from Russia. And as a side benefit fertilizer could be produced from the same sewage.

^ even so it would probably take a couple of years to get methane generation going at scale.

On the other hand we’ve managed to have bakeries for 1000s of years before most modern energy sources were discovered.

Wood is an option, but it will require a lot of wood to fire Europe's bakeries.

Unless those bakeries can deliver baked goods at similar cost to bakeries using modern energy sources, the problem still stands of the populace having a downward shift in consumption and expectations of their quality of life , which typically has political ramifications.

Are people blaming environmentalists for attacking nuclear energy all these years? France stuck to it, but Germany seems to have bowed to pressure. The lesson is always to dismiss idealists and ideologues in politics.

Half truth, the green parties wanted a replacement, solar and wind.

They only wanted gas as a switch off / switch on power source, you cant do that with nuclear.

Instead, people protested also against wind and solar and we switched to cheap gas from Russia.

Which the green parties didn't want at all..

How does India do in all this? Their software development salaries in tier 1 cities are close to 100k or more. Lots of friends going back .

Pretty poorly on food security. Energy situation won't be great. I would expect india to supplant China as the bogeyman over the next few decades

Wouldn't that be great? America can't seem to function without a bogeyman. The world would be so much a better place if the bogeyman was a democracy like India instead of China or Russia. Shift that Overton window!

My comment largely comes from India looking more authoritarian by the day, not to mention playing both sides of the Ukraine invasion.

They are behaving as expected since they are beholden to Russia for military equipment.

100K USD? That's wild. If you look at the GDP per capita ratios, that's like a dev in the US making $3.3 million

He has a book out I'm reading. Good so far: https://www.audible.com/pd/The-End-of-the-World-Is-Just-the-...

Great book.

I used to work in the Pentagon, and while we never took Zeihan's talks without a grain of salt, directionally he tends to be very accurate. Nations like China which lack a culture of immigration have extremely predictable demographic booms and busts, and Zeihan is spot on with those. He also hits on the reality of how dependent most nations, especially China, are on imports that pass through oceanic shipping lanes they have no ability to control or secure without the US Navy.

To be fair the us navy hasn't completely detached in the way that he expects... Yet. Shipping harassment hasn't appreciably gone up... Yet. It's also possible that cargo ships will arm themselves against pirates, which will increase the cost of shipping but maybe not as much as the most dire predictions.

I suspect the point of "oceanic shipping lanes they have no ability to control or secure without the US Navy" is "shipping lanes they cannot secure FROM the US Navy".

There is no way for a cargo ship to arm itself against submarines.

I think the outcome of the US navy torpedoing civilian ships of a national adversary is highly unlikely, unless 1) we were actually at war with them or 2) they are doing something generally accepted to be illegal -- like Chinese fishing boats turning off transponders and fishing in us territory. or 3) sanctions running

The only way I see the landscape changing meaningfully in the direction you suggest (cargo ships going up against seafarers they are not able to defend themselves from) is if letters of marque were reinstated. At least one proposal has been floated -- and when we all stop laughing about it I grant that it might become a thing

Given today's low cargo crew counts, it isn't crazy to think about the calculus of sinking cargo ships vs fighting an actual war, in order to prove ones seriousness.

Say, because Taiwan was being invaded?

And in the form of a blockade, of course.

But isn't sinking a civilian vessel itself an express path to war? The RMS Lusitania and the US's entry into WW1 spring to mind.

If the nations involved want it to be one, sure. There have been incidents of militaries shooting down passenger jets, which were all but swept under the rug.

This sounds plausible but can you provide examples/links to wiki pages etc?

Off the top of my head:

Korean air lines flight over Russia, us shooting down Iranian jet in the gulf, Russia shooting down Malaysian air over Ukraine, Iran shooting down a Ukrainian jet over itself.

I presume gp means Not swept under the rug in terms of information suppression, swept under the rug in terms of very little diplomatic fallout

Also, the multiple Iranian/Israeli ships that have mysteriously sunk in the last few years.

Makes sense so far, but do you guys have flight numbers/dates/names of Iranian vessels etc?

@throwawaymaths basically answered the question how I would. Also, just to clarify my use of "swept under the rug", my implication is that when it's not politically convenient for the parties to make a big deal out of an incident, they simply choose not to use it as a media prop to push their agenda.

There's a list here that would be a reasonable starting point for any further digging you might wish to do:

https://en.wikipedia.org/wiki/List_of_airliner_shootdown_inc...

I'm a fan but he does get a little too blinded by America patriotism. His predictions about other countries start getting too comically apocalyptic to be taken seriously at times.

Well he does get credence for predicting invasion of Ukraine (which was also thought to be comically apocalyptic). Twice. He's been remarkably consistent in calling bad times for china and it's certainly gotten worse over there in the last year.

I think there are a few other things that have lined up, like Sri Lanka collapse being a bellwether for his forecasts.

Do you have a source for his Ukraine invasion claims?

The last time someone mentioned this, they said he'd predicted they'd invade in 2014, which is after they'd invaded and annexed Crimea.

Well, they did invade Donetsk and Luhansk in 2014. I don't know if that was after his prediction, though.

Invasions were early 2014, book with "prediction" was published November 2014.

After I got turned on to Petar Zeihan the first thing I did was went back and watched his older talks, after all plenty of people can make good sounding predictions, first you want to see what he was saying before to see his track record.

I found a talk form 2018 in which he said there are going to be 3 major bush wars of global import, Ukraine-Russia, Iran-Saudi Arabia, and China-Indian Ocean. So far Ukraine has panned out, he also predicted where the political parties are going right now in the US and why they seem so out of whack.

He predicted the Iran-Saudi Arabia conflict thats been going on for decades?

https://en.m.wikipedia.org/wiki/Iran%E2%80%93Saudi_Arabia_pr...

He's claiming it will get hot, and less proxied, so that is distinctly something that has not happened yet.

“While ever-shifting economic, political, and military pressure pries the Ukrainian state apart, the Russians will begin ... Once those areas are pacified the Russians will return to Ukraine, “rescuing” those in the Russified east and…”

Source: https://books.google.com/books?id=vn-BAwAAQBAJ&printsec=fron...

EDIT: I had an incomplete copy paste on the link so I corrected it

Yeah, he has been accurate. But he's also been screaming that China is going to collapse within this year, which seems very far fetched.

Do agree with his broad thesis though. America is in a very good spot.

I also predicted the invasion of Ukraine. So did the US intelligence service last summer. So did the state department when trump was trying to extort zelensky over military aid for a hunter Biden investigation. Not a hard prediction to make at all after no one gave a shit about crimea, especially given putins longstanding goal of Soviet reunification.

The narrative of "the NATO closet is bare" has been pretty thoroughly debunked:

https://www.youtube.com/watch?v=7CmXz8Qd9yw

(I highly recommend Perun's channel for analysis of the Ukraine war)

Also, it's a bit hard to take seriously someone that says "so no jets, no F-35, no battleships". Sure it's a throwaway line but it seems like someone trying to communicate something serious wouldn't refer to literal battleships, which nobody in the world uses anymore. It's not something that Perun would say.

The post you're replying to mentions huge youth unemployment in China, doesn't Zeihan think China will collapse because there won't be enough workers? I was considering reading Zeihan's recent book but he comes off as kind of a fraud.

Europe has plenty of energy. They sit on huge gas reserves, for instance, but have decided to effectively ban using them by banning fracking while still being extremely dependent on gas. And not only that but most of gas imports came from a geostrategic adversary...

This is all self-inflicted. You can't prevent people and countries from shooting themselves in the foot.

Netherlands stopped fracking because their population density is too high to just sweep the environmental damaged caused by fracking under the rug, the only thing that is self inflicted are the now unavoidable earthquakes in the Netherlands.

The Netherlands did not stop fracking. The earthquakes in the Netherlands are not caused by fracking.

I ask this question every so often on economic threads - Are jobs created or discovered? What field of study is most associated with "new jobs"?

spark+kindling+gust

Jobs are more often created than discovered.

Tomorrow we might discover a new kind of math, requiring newly trained mathmeticians in a novel field.

Those mathmeticians will need admins, business services, places to work, food, etc.

Thus even the discovery of a few jobs has more jobs created than found.

The mathematicians don't need any more food than they did before the new kind of math was discovered. Why would you count that as job creation?

The single mathematician no, but a new field would lead to the creation of a new building with new people at some point.

Every one of the people in that building needs the same amount of food they did before they moved in.

Same amount of food yes. But if a mathematician was just sitting on the sidelines before this new field, they may decide it is more productive to trade time they spent on preparing food for more time to spend on math.

That's just moving the food job somewhere else.

It's not clear that this thread is about. Jobs a weak approximation of utility creation + equalit of the distribution of that utility.

Having food is not the hard part, the logistics of food is the hard part.

Feeding one person is easy. Feeding 200 people with a mix of allergies is hard.

On the other hand, when you're already feeding 4000 people, feeding 4200 people is not noticeably harder.

I don't think that's particularly relevant here. We're going to see jobs open up in the US (and Canada) because even with higher labor costs, the strong dollar and available energy will make it easy to purchase goods and build things here. They won't be novel jobs so much as leveraging an absolute economic advantage against every pretty much every other nation on earth to steal jobs from other countries.

But I guess to answer the question, jobs, especially at the bottom are "enabled" more than anything. We want people to do simple tasks, but tech advancements make it efficient enough to actually pay people to do it. Like rideshare drivers, ignoring valid claims about vc money burning. Some new types of jobs might be created or discovered but most jobs changes are about determining whether its viable to pay something to do something you want to do. The idea to have them do it has always been there.

The fields are macroeconomics and labor economics. I don't understand your other question, so it's hard to answer. What do you mean by "discovered"? Discovered by whom, the employer or the the employee?

But you may be interested in knowing that models of labor markets are often based on matching models - you've got two groups (employers, employees) and everyobdy is trying to find {one,many} members of the other group that are a good match.

> The fields are macroeconomics and labor economics

As I understand it, those are mainly concerned with reduction in labor costs.

Job discovery is a phrase used by Clayton Christensen to describe finding a job to be done. He uses it to describe finding a product to sell to people to perform some function in their lives - a job to be done by a product that you make. I'm using it as an alternative to the idea of "job creation" because I don't think that's real.

There is a certain political narrative about job creation and job creators. I tried to find support for it in academia and I could not.

I didn't want to put all this in my original question because then I would only get political replies.

---

About politics - Yes my question has some political motivation, but I am genuinely interested in the subject. My motivation is not to prove or disprove, but to learn. You don't have to believe that about me, but I do.

> As I understand it, those are mainly concerned with reduction in labor costs.

Where does your understanding derive from? Reducing macroeconomics to "reducing labor costs" is akin to reducing classical mechanics to "computing projectile trajectories". I don't know Christensen but I take it that he's a business school professor and I guess that was the target audience he was speaking to there.

You're not wrong that economics is a discipline that is not free from ideological biases, but I guess you're going a bit far in reducing the discipline to that. People still want to answer questions with data, like "what happens to unemployment (and exchange rates, and investment,...) if we raise interest rates?". Labor economics might ask more narrow questions like "what happens if we raise the minimum wage?". That's the sort of questions that economics deals with, not musing over the semantics of creation vs discovery.

Saying that jobs are "discovered" instead of created is akin to saying that code is discovered instead of created. When you program you create code, there are many ways to structure it so the code will look vastly different, therefore it doesn't make sense to say that the code was discovered, it was definitely created.

Jobs are the same, when you create an organization there are countless ways to structure it and you will create different jobs depending on how you do things. Job creators are the people who create organizations, the better they do their job the more these organizations can do with less people so the more wealth there will be to share, so job creation is an extremely important job.

Did Zuckerberg discover all the jobs that Facebook has? I think it’s a bit silly to frame it that way. I’m not going to say he created them either though, but he definitely contributed to the creation of all those jobs.

Your understanding of what economics is interested in is also incorrect. I guess business programs are concerned with reduction of labor costs. Economics is concerned with efficiently allocating scarce resources.

Christensen isn't distinguishing creation from discovery, he's just using a buzzy term to describe his version of the same basic idea: increasing demand for labor and goods.

Thank you. I found this deck which really helped.

https://economics.mit.edu/files/7400

and Open Coursework page

https://ocw.mit.edu/courses/14-661-labor-economics-i-fall-20...

A labor matching model is better because it recognizes the need for a worker and a job opening, and for those to find each other.

And while we're at it, if a tree falls in a forest with nobody around to hear, does it make a sound? I don't think there's any difference of facts to debate around created or discovered, just semantics.

What is the difference between "created" and "discovered" when it comes to jobs?

Was "social media manager" created or discovered? How about (to take an older example) telex operator?

Central economic planning still doesn't work.

Neither does no planning and complete decentralization (no national industrial policy, no trade barriers, letting important supply chains move out of your control or even into the borders of your adversaries).

Actually, the chaos of the free market works very, very well at producing the most prosperous countries ever seen.

Which country are you referring to? I rather suspect that their government is a good deal less hands off than you're implying.

The US is a fine example, especially the first century.

Very nearly the first piece of legislation passed after the ratification of the constitution was a tariff.

The market works in spite of bad legislation not because of it

You can low price tickets for Hamilton now. It's a great show and has some interesting bits Hamilton's contribution to, as fictional James Madison put it "nothing less than government control".

It's never worth discussing political economy with die-hard free market types, because the they claim the US is a free market when it suits them, then deny it's a free market (calling it "crony capitalism", for example) if you point out legitimate flaws in the economic system.

Not to mention, the notion that the US was a free market at any point in its history is unequivocally false, and anyone who thinks a system that observes slavery qualifies as a free market should be embarrassed.

The US was never a 100% free market. But it was pretty close, and the beauty of a free market is the closer it is, the better it works.

> anyone who thinks a system that observes slavery qualifies as a free market should be embarrassed.

I usually say "excluding the slave south". Nevertheless, let's compare the slave south with the free north. The free north economically buried the slave south, which was a major cause of the southern rebellion. They wanted to protect their economy from the depredations of free labor.

The south lost the war because the north buried them with arms and supplies and trains and everything needed in plentiful supply to destroy the southern barefoot armies.

A similar thing happened in both WW1 and WW2. The American free market decided the fate of Germany and Japan the day the US entered the war, because Germany and Japan simply were overwhelmed. The US supplied not only themselves, but supplied Britain, France, and Russia, and still buried Japan with overwhelming endless supplies of everything the military wanted.

The Japanese understood this (Hitler didn't), and tried to win WW2 with one stroke (Pearl Harbor). When that failed, they put everything on the line at Midway. The carriers were sunk, their best pilots were killed, the planes were lost, and Japan could not replace them, and everything went downhill for them from there. The US lost carriers and airplanes and just built lots more.

Hitler lost WW2 the day he declared war on the US, in probably the stupidest military move in history. You can't win against a free market country unless yours is free market, too.

Correlation may not imply causality here.

Many of the most successful free market economies embody the concept of "was born on third base and thinks he hit a triple."

The United States and Canada had relatively easy access to territorial expansion, which offered them huge amounts of fertile, temperate land and almost any natural resource needed. They also started with a high-immigrant and relatively educated population.

South Korea got to build their economy late enough to be relatively unburdened by legacy costs. They also had a Western world more than willing to ignore a series of presidents-for-life, domestic crackdowns, and incestuous government-industry relationships as long as they kept Kim Il-Sung up in the attic.

Even Singapore had the advantage of being ideally located for trade purposes.

With those benefits, was the free market necessary to unlock their success?

Conversely, if you dropped (say) the American Founders in 1917 Moscow or 1948 Peking, would they do any better?

Russia has even more natural resources. Doesn't seem to help.

> if you dropped (say) the American Founders in 1917 Moscow or 1948 Peking, would they do any better?

Absolutely. See Hong Kong, Japan & Germany after WW2, Chile does better when they go free market, does worse when they veer back left, etc. South American countries have vast resources, but little prosperity.

US immigration consisted of people in abject poverty, who arrived illiterate with nothing but a suitcase.

Pinochet's economic policy is highly overrated:

https://news.ycombinator.com/item?id=32765771

> Mining a bunch of copper, helping your cronies get rich, and pumping up land prices is not a "miracle".

And that's from an ideologically aligned source.

> This record is less bad than Allende’s, but it’s far from what I’d call good, and it’s certainly nothing that anyone should call an economic “miracle”.

But Russia has very limited access to viable shipping lanes and huge geographic barriers to shipping things overland. Why do you think Crimea is of such importance to Russia?

Re South America: Guatemala had incredible, almost miraculous success when Jacobo Árbenz did his landmark land reforms. The idea was simple: (1) unused land over X ha was expropriated (and the owners compensated), and distributed to previously landless peasants, and (2) credit lines were made available for those peasants to buy farm equipment, do renovations, etc.

The success was astounding. We're talking child mortality being halved and poverty rates dropping off a cliff, in only a few years. Of course, US businesses did not like it very much and US imperialism shut it down in violent fashion, and Guatemala has been an unstable and violent place ever since, with a long string of brutal dictators.

What is "funny" in a deeply grim and sad sense is that this was at once socialism (i.e. means of production to the people who work, rather than a separation between those who work and those who own), but also very much the American Dream: a plot of land which was your own, for you to work, and where you own the fruits of your labour. You, not a king, not a robber baron, you. That's why the violent stampdown by the US is especially disgusting and hypocritical.

As for Chile, it had a democratically elected left-wing government. Even if Pinochet's economic policy turned out better (which it by most measures did not), NOTHING can justify a violent operation to overthrow that government, to the tune of tens of thousands of tortures and deaths, to implant one that pursues your favoured brand of economics.

The problem with this statement is that we don't have free markets. We have monopoly ridden markets.

Lovely to hear this kind of thing on HN :) The free market looks like 'chaos' because it has millions of people making economic prioritisation decisions, as opposed to a control economy with few people. Millions of people making prioritising inputs vs a few, leads to a far more effectively prioritised economy, surely. And the proof is in the pudding!

Sometimes I think I'm the only person on HN who writes anything positive about free markets, which are the source of the great wealth in the United States and some other countries.

I really don't understand the romance with leftism, where the historical record of its implementations is pretty miserable.

Well, the part of the China's economy that works isn't centrally planned.

They do seem to have a very planned part (looks like so from the other side of the world), that isn't internationally competitive. But simply claiming that their economy is planned is clearly wrong.

> But simply claiming that their economy is planned is clearly wrong.

I didn't claim that. I was pointing out that the centrally planned part isn't working. China has a mixed economy.

Can you expound upon your analysis? At the moment you are simply assuming your conclusion.

The specific failure modes we keep seeing are 1) having a country run by an autocrat who does not listen to advice, and ruthlessly stifles all dissent; and 2) using measures as targets.

Continued unabated fossils use indeed is sinking the other boats to get ahead short term, but hopefully enough people will disagree to get some less cynical climate cognizant energy policy going there.

> US still having stable energy and farming capabilities

Don’t these industries depend on inputs from around the world?

Nah. Canada real estate has to take the hit.

What effect will that have? If some Canadians go underwater on mortgages, won’t others who were priced out be able to afford now? I guess some will lose jobs but what’s the big downside from a country perspective with having cheaper housing? Or are you concerned about immediate effects?

It's not only about being underwater on mortgages, but having your morgtage payment double (and maybe tripling soon...). Reddit is full of panicking homeowners who are starting to straggle with payments. This will have a wide effect on the whole economy because any discretionary spending will evaporate.

Are adjustable rate mortgages common in Canada?

Canadian mortgages have separate amortization periods (say 20 or 25 years for example) and interest rate terms (generally 1-5 years, after which the rate has to be renegotiated -- and you have the option of transferring the mortgage to another lender at that time).

You can also let your rate float with the market, which is called a variable rate mortgage.

Interesting. Do you know why mortgages in Canada are so different from the US? They seem much more risky on the buyer’s side.

Nobody but the United States has long-term fixed rate mortgages: they're horrible for lenders because the lender has to assume all interest rate risk. The reason they exist in the US is because the government acts as a backstop due to pro-homeownership politics, but it causes a bunch of market distortions that are made invisible to American borrowers.

30 year fixed-rate is very much the norm here in Denmark. There was a period of experimentation leading up to 2007, but I think fixed rate is very popular. I'm certainly happy that's what we went for when we bought our first house two years ago.

It's hard to call it a "norm" when it's so new that no one has yet seen one completed.

It's been like this for at least 50 years, maybe more - the underlying system of credit associations goes back to the lat 1700's.

The mortgage market was very tightly regulated to really only permit the 30-year fixed-rate mortgages until 2002.

We have them in the Netherlands.

> a bunch of market distortions that are made invisible to American borrowers

Anyone who has taken a five-minute look at the real estate market in any major US city can see those market distortions plain as day.

> Do you know why mortgages in Canada are so different from the US?

The U.S. has been heavily subsiding mortgages since the great Depression, through programs such as FHA. Banks would not be willing to loan people money at such low rates over 30 years unless the government and taxpayers backed the loan.

Because it's more profitable for the lenders, and Canada's government is happy to bend over backwards to make old-boys-club-businesses like banks and telecoms comfortable.

The USG massively subsidizes home ownership. The burden is passed down to taxpayers, but also may cause a drag on the global economy due to lopsided interest rate hedging.

USG massively subsidizes home debtorship, driving prices up to benefit legacy landowners.

It's not at all clear whether the policy actually helps ownership.

That's correct, and a fair refinement.

supposedly about a 1/3 of mortgages are variable in Canada. But more importantly, fixed mortgages are almost all 5 year terms (or less). That is, every 5 years you have to renew your rate (even though the mortgage amount is for 25 years). That means every year, about 20% of homeowners are updating to the current fixed rate (assuming an random distribution of purchase date). Perhaps a big chunk renewed early in 2020, but by 2025/2026 all mortgaged homeowners will have a new higher rate.

The allure of home ownership in America is the fixed mortgage rate among other things. (Rent goes up each year, without question).

I purchased a home at the start of this mess with an 2.6%. Right now it's hovering around 6%. I would say I MASSIVELY lucked out.

Does Canada not fix the rate? I am confused -

No, the US is the outlier with the 30 year fixed rates. Canada not only has variable rate mortgages, but instead of the rate just adjusting, they essentially have 5 year mortgages, with a balloon payment at the end. If you can't roll it over into a new load (say because your debt to income is now too high), you're screwed.

Sounds the same as UK then.

Wow - this is mind boggling. Also..kind of scary? I guess any big financial decision is scary but I didn't know that was America exclusive. Do you know if European countries have fixed rates or does it go up ever 5 years or so

Europe is like Canada. Often there is 3 or 5 years of fixed, but then it's often euribor 12month + spread. Often in Albania it's euribor 12M + 3 or 4.

Has to? Why?

It is common to have adjustable rates in Canada, while the standard in USA is fixed rates.

So in these times where rates go up, it makes Canadian homeowners suddenly have to pay more for their houses they're already living in.

Well, I hope those people don't end up homeless. I don't see how the housing market crashing is going to be good for them.

IMO the best option for Canadian real estate is for prices to remain stagnant for a long time, allowing wages to catch up, and decouple the idea of your primary residence as being a good retirement plan.

Why would wages catch up? Wages can go down.

https://www.cibc.com/en/personal-banking/mortgages/resource-...

In variable rate mortgages, the amount going to principal vs interest changes. The monthly payments remain constant.

Until you hit a trigger rate (depending on the mortgage specifics) at which point you have to start increasing your payments.

OK, eventually they have to pay more. Still painful.

Sure. And that will suck. But the country will still be better positioned than anyone. Especially once they finish the pipeline to ship LNG to Asia

>Especially once they finish the pipeline to ship LNG to Asia

I have my doubts that the US will allow that to happen. The resource curse is real.

Canada's real estate situation makes no sense to me as a US citizen.

* Plenty of land

* Plenty of wood

* Plenty of sources of fresh water

* Pro-immigrantion policy could reducing construction costs

* Seemingly high rate of 'cottage' ownership which seems like a second home to me, which seems to indicate abundance?

* Remote working situation good

* Fiber can't be that hard to roll out to new places right next to roads plus Starlink exists

* People don't seem to mind the weather too much?

In US, these things seem less abundant as lots of our land is allocated already as opposed to just being crown land

> * People don't seem to mind the weather too much?

I would start with questioning this assumption.

Also, based on their terrible choices of ISP and mobile networks, I would question this one too:

> Fiber can't be that hard to roll out to new places right next to roads plus Starlink exists

> Plenty of land

Land is generally not very valuable by itself, it is locations that are valuable (specifically desirable locations in growing cities). There are highly limited locations available in Canadian cities, particularly the desirable cities of Toronto and Vancouver.

Same with the Bay Area, NYC, Hong Kong, Singapore, Sydney, Auckland etc. Singapore does probably the best job of the above at keeping housing relatively affordable despite very limited locations.

I think the US and Canada are really similar here (and maybe it's global), but essentially the trend is:

1. There has been more demand for living in cities and less for rural areas

2. That demand has not been met with the same increases in housing supply, so prices rise

3. Low interest rates make housing an even more attractive investment, and throw gasoline on the fire

Re: lowering interest rates, China has the largest foreign currency reserves in the world at over 3 trillion USD. So where most sovereign currency issuers can’t print money without reducing the value of their currency - or increasing interest rates to compensate - China can defend the value of their currency by purchasing with it foreign reserves.

I’m not an economist so I can’t tell you how far they can go with this. But they have an atypical margin for error correction re: interest rates / money creation.

> farming capabilities

Let's just hope that the upcoming megadrought (worst in 1,200 years) in the Western US does not get too dry.

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