A global recession is almost certainly coming and the Fed is to blame, says UN | Hacker News Reader

A global recession is almost certainly coming and the Fed is to blame, says UN

fortune.com

21 pointsscifibestfi30 comments

Do I trust the Fed with respect to how to manage the economy? Maybe not.

Do I trust the UN more on that topic than I trust the Fed? Absolutely not.

Fuck the UN. They know nothing about economy, they are just trying to get some publicity, after showing their uselessness in stopping the war in Ukraine.

It's just a hang out spot for beaurocratically-minded, listless Harvard grads at this point.

They’re also an absolutely horrible neighbor. Diplomats are terrors on the streets and regularly rape New Yorkers without consequences.

I have no respect for them - can’t stop Russia, the Uighur genocide, or Iran. What are they good for?

They stopped US from pillaging Middle East.

Really??

If someone has a good argument in favor of less cooperation and less coordination around the world, I'm all ears.

If someone knows of a better hope out there than the UN to encourage cooperation and coordination, I'm curious to know what it could be.

Far as I can see, unless there's a miracle and we strengthen the UN, our grandchildren (or maybe us) are in trouble.

Well it depends on what the end goal is for the international organizations like the UN. Is it for there to be a single government to ensure no more nationalistic conflict? If so I can think of quite a few arguments against that. And if that's not the goal then what is it, specifically?

International _Cooperation_. There isn't a need or a want for a single supra national government at this point in time considering how diverse the world is. So a world forum for government is what we have. You have to remember this is as close to the rule of law as possible in the current context.

I'm curious, why do you say "at this point in time"?

He's not ruling out that, as the world becomes more hogenous, we might develop a global cultural identity and we might at some point want a global government.

Oh great, an inescapable one world government, how dystopian.

Not really that dystopian: different cultures we have now, they evolved because people were spread across the whole earth with no means of instant communication. Now that we have Internet, cell phones, etc. we will eventually blend into one culture (over the next 200-300 years). That's not a problem really. What is the problem is people who are impatient, and try to speed up the whole process. Such as current European Union leaders. Trying to force the change, instead of letting it happen naturally provokes unrest, conflict, rise of nationalism, etc.

You sound like you don't understand the basic of how the UN works.

Economics is not my area of expertise. So, I apologize if my questions is daft, but what other choices did the Fed have? Surely they considered multiple scenarios and chose the one with the least harm:benefit ratio, right?

They don't. The options the Fed has are:

- Continue printing/lending (enabling further inflation)

- Cut printing/lending (economy/markets crash)

- Try to perfectly balance the level of printing/lending (resulting in a period of economic stagnation and slow growth as we pay off our debts / deleverage. AKA the soft landing)

Option 3 is what they're trying to do, but it's unrealistic to achieve as it requires perfection not only on their part, but on market participants as a whole, so some degree and combination of all 3 is likely to happen.

I think a consistent criticism has been of their idleness in response to the inflationary threat and not taking it seriously enough, soon enough. It didn’t take fortune tellers to see where things were headed in spring of ‘21 but we kept injecting cash and keeping the cost of cash near zero. Lots of excuses for why that is, but behind the eight ball is where they landed. Their considerations are as you describe but their concept of benefit includes the political, their finance industry customers, and many other conflicting interests. So harm:benefit, yes, but some people’s perceived benefits can certainly cause harm to the greater economy.

We have a saying in my country: the best sailors are on the shore giving advice to captain on the boat.' Sure, they might have taken inflation more serious earlier and dramatically raised rates. Guess who would have been blamed for the subsequent recession and being branded as too afraid of a little bit.of inflation?

This is the rapid and now unstoppable decline of globalization and as an institution of globalization the UN might be a little worried about its future and ready to lash out.

Covid, demographic decline, and possible nuclear war are bigger than the fed.

It couldn't be insane and far-overreaching lockdowns, right? It couldn't be war and supply chain problems, right?

if you're really bad at math, then yes, it can be those things.

No, it’s not global lockdowns or millions of deaths or a war or sanctions on a major world energy producer. It’s interest rates going back to a level not seen since (gasp) the 2000s!

If you're going to sling insults, you should explain what you actually mean. Here I assume "bad at math" means "does not accept an explanation that focuses on the size of the M2 money supply", or something.

But is the original post really so wrong-headed?

China is engaged in fairly destructive lockdowns, no? (If this is because they don't have a good vaccine, and this hurts the US economy, should the US simply supply them with MRNA vaccines? Or is some zero-sum game with China more important? Or will China not buy them?)

Gas to Europe is definitely restricted. This definitely hurts European industry, particularly in Germany. This in turn could be expected to lead to shortages of whatever those industries make.

More importantly, gas is made into fertilizer, so we can reasonably expect agricultural yields to drop, and/or for food to be more expensive.

These are all the kinds of supply-side issues that OP seems to be talking about. These points don't seem dumb to me. Why are they?

Is it just because he led with a complaint about lockdowns, which used to code affiliation with the political Right? I think we're past that now, since western countries no longer do lockdowns. Now it should refer more to China and to supply-side issues. And, a focus on supply-side issues is now more Leftish, in fact. So political tribalism isn't a very good guide here.

Me, I happen to think that the supply side issues have a lot of weight to them.

That is all, admittedly, based more on narrative than on numbers, though. So what "math", if any, does this leave out? If something is missing, I actually want to know.

> China…should the US simply supply them with MRNA vaccines?

They would have to ask for them and they’re not going to ask. They’ve spent years spreading propaganda that states the mRNA vaccines change your DNA, don’t work, that their domestic vaccines work amazingly, etc. It’s difficult to turn around from that and order a few billion doses.

— past that now because in hindsight the criticisms were… right. Largely fair and too-often blindly dismissed. Lockdowns had a devastating impact relative to the benefit, and we’re still suffering the effects. Motivated by fear, often accelerated by the power-mad. I think it’s lunacy to look back on that mess and imagine the strategy worth repeating. Let’s not gloss over this just because it’s “in the past”. Coded affiliation with the right is not a rational defense against skepticism of government policy. It’s a rhetorical defense aided by very loud bullhorns and media budgets, but hardly a rational one.

The Greenspan Fed and the Bernanke Fed maybe. This issues have been a long time coming. Blaming them on the current cohort is naive.

This pretty much just boils fown to wokist 'ignore the systemic issues and make sure you have someone to publicly yell at" politics. Not a great look for a 17 year old on tik tok. Certainly not a great look for the UN

Hell yeah someone who gets it. Maybe you can help me: Greenspan wrote a pretty pro-gold standard paper when he was young. When did he turn into an interest rate interventionist? Did he write about it?

Seems like the prevailing theory is that increasing the maximum money supply increases jobs, ala Keynes's buried money jars. But I can never seem to find anyone who addresses the quality of those jobs i.e. impact on the (real wealth)/(money supply) ratio.

I'm somewhat convinced that Say's Law was the big detour from sensible economic theory. Simply put, production sustains humanity. Without production somewhere there's no consumption. Handing out money fundamentally does not spur production. But also since money is half of every transaction, the scarcity of money & the value of money over time is crucially important to not interfere with.

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