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Comment by status200 | Hacker News Reader

Hopefully this does not come across as whining (as i managed to escape the debt cycle), but this really seems like they're saying "the investment money train is over", which is just another slap in the face to my generation, who were already dealt a pretty crummy hand.

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Unless you're unlucky enough to have a short life, you're going to live through several boom and bust cycles, so get used to it. I've personally lived through the collapse of the LTCM hedge fund and Russian economy while I was at Credit Suisse in 1998, the dot-com bust while I was at eToys.com in early 2000s ($6Bn market cap then delisted from Nasdaq and sold for $2MM to KB Kids), the housing bust of 2007/8, and now the current stock market collapse which is just getting started.

Every crisis presents opportunity, provided you're not just spending your life riding everyone else's coat tails. Busts are particularly good for entrepreneurs because we don't have to compete with all the stupid money out there feeding the swarming incompetents. A bust is a time for true innovators to rise from the ashes.

The boom and bust business cycle is very different than a protracted run of near zero growth

There's asset price inflation, productivity growth, technological growth, and population growth.

I'm not sure why anyone thinks we need more people.

Humans make up 34% of all land biomass.

There are physical limits to technological growth. We're already getting close to the physical limits for how good a lot of things can get. Short of living in a fairytale, I'm not sure what people are hoping for.

Productivity growth is predominately going to come from technological growth. However, much of the world is ridiculously under-invested in. We have generations of growth left here. Why do we need more people when ~70% of the world is ridiculously under-invested in?

Asset price appreciation is good if you own assets - bad of you want to buy them. In an ideal world, I think assets would be valued based on some kind of sense - not whatever central banks decide.

A run of near zero growth is exactly the same as a bust, so I don't know what you're adding.

That's technically not true if you're running a DCA model (which most people do when they invest in the stock market - they invest a percentage of their earnings), since the price at which you invest is better under a bust scenario than a protracted run of zero growth.

3% a year in real terms is not near zero. It's what the actual state of the economy has been for decades, if not centuries.

When was there near zero growth? The last decade has seen a boom of VC investment and startup growth. There was the Great Recession before that, following the post 9/11 growth spurt. It seems like the last time there was no growth was perhaps the late 70s?

It's hardly uniquely shitty.

There's bound to be people lived through the 1906 SF earthquake as a kid, the trenches of WW1 as a young adult (1917), then the Spanish Flu (1918) and then once things started looking up for them, either the 1929 stock market crash and/or the dust bowl came and took it all away again.

Of course on the other hand, just because someone has had it worse doesn't make things not bad.

And if you survived that, you got slapped with WWII. Which in Europe and Asia could have meant complete destruction all around you.

In fact, in Asia, it didn't really improve from there for quite some time.

Yeah, it's basically 20th century Candide for much of that generation.

How about being born in 1890 in China? If you lived until 80 you’d have gone through: the first Sino-Japanese war, the Boxer Rebellion, the 1911 Revolution, the Warlord Era, the Northern Expedition and Chinese Civil War, the Second Sino-Japanese War, the second part of the Chinese Civil War, the Communist Purges, the Great Leap Forward, and the beginning of the Cultural Revolution.

Its really not that crummy a hand. Maybe it’s not as good as being born in 1948, though they had to deal with medical issues that you never will, not to mention the military draft. But that’s not the only point of comparison ever. The destruction in Europe created a period of unprecedented prosperity in the US.

The student debt that is endlessly whined about has been transformed over the last decade from real debt to a marginal tax on income. This is the same system that’s used in Australia and the UK.

Then there’s the run up in house prices. A real phenomenon but this idea that home ownership is the sine qua non of a happy life is a transitory culture artifact, not any kind of human universal.

I would say having housing is pretty important and rents are rising too.

Real income after housing costs is still very high both in historical perspective and as compared to other industrialized nations today.

This is like US doctors complaining about malpractice insurance cost. Sure, it’s high, but even after that look at income vs Canada or the UK.

“Sure, we’re moving in the wrong direction, but at least we’re not as bad as those guys yet” isn’t that comforting.

“who were already dealt a pretty crummy hand”

Which is it?

Yes, I am not one of those people who is foolish enough to think that it would have been better to have been born in 1940 than today. Of course quality of life and real incomes are higher.

But I think in the microscale, it might have been better to be able to invest in this most recent bull run when housing was also lower cost than the next decade or so.

It's a crummy hand when the cause is increasing wealth gaps. The money was there and is there. Policy has shifted how much of it the middle class ends up with. That's crummy.

I admit I don’t get the obsession with inequality when the absolute numbers are so high. It feels like a generation is treating envy as a virtue rather than a vice.

Accusing people of being jealous isn't engaging with their complaints.

It's not envy. It's rightly expecting a fair share of the pie you helped make.

Some people are contributing to making that pie bigger and a lot of people aren’t. Why should the people whose contribution is steady or negative get a fixed fraction of the pie? What’s fair about that exactly?

What's fair about Zuckerberg becoming billionaire by basically pure luck? There are millions of people more hard working and more intelligent than him but they were unlucky. If not Zuckerberg then someone else would create Facebook, he was surprised by how successful FB was. Calculus was discovered independently in the late 17th century by two mathematicians and it would be discovered if they both would die before doing it. It's all statistics, you can have the best idea in the world but be in a wrong place at the wrong time and you will fail.

I might have been elected president. I wasn’t, but I might have been. Should Biden have to split Air Force One with me?

Seems like a straw man, it's like asking - I'm not husband of this woman but I could, so should she split this kid with me if I want to? This is different to sharing wealth, we already tax people so we share their wealth with the rest of the society but we don't share other people kids, wives or Air Force One.

You want more of the other guy’s wealth but you don’t want to give more of what you have to the many many in the world that have a lot less than you.

I get it. I just don’t respect it.

No, it's the rich who want our money. And they were getting better at taking it. With the labor shortage working class folks are starting to realize no one gets rich if there are no workers and people are demanding better pay. Good for them.

That's a different topic. We are talking about the middle class getting less than they did in the past, and that extra money going to the rich.

It’s the same topic. Lots of middle class professionals have essentially the same output as their forebears did 40 years ago. They are not expanding the pie. They are nonetheless richer in absolute terms, but have pulled away in relative terms from those that are much more productive than their fore-bearers. This is perfectly fine but for envy.

> Lots of middle class professionals have essentially the same output as their forebears did 40 years ago.

No, they have much higher output.

> They are not expanding the pie.

They are.

> They are nonetheless richer in absolute terms

They are not. It takes two incomes to do what one income used to pay for. Lots of middle class people cannot afford to even buy a house. Something most of their parents managed to do at a young age.

> but have pulled away in relative terms

Yes, this has also happened.

> those that are much more productive than their fore-bearers.

Much more productive? That's also not true.

> This is perfectly fine but for envy.

If it were envy, the middle class wouldn't be asking for better wages. They would be asking to become rich. It's not envy.

“Lots of middle class people cannot afford to even buy a house. Something most of their parents managed to do at a young age.”

This one thing seems to be something of an obsession. How much did it cost their parents to have a child at 40? Or to cure prostate cancer?

Owning a house is not an obsession. Shelter is a basic human need and people across many cultures own houses.

And no, it's not one thing, it's just one example. People aren't getting paid as fairly as they used to.

Yes quality of medical care has improved. That's not the discussion. We're talking about fair pay.

You made this up. Average labor productivity has steadily increased over this time.

I assume you’re fairly young. I know things look pretty grim at the moment, but in the longer term the younger people are going to be in the driver’s seat like few generations before. The demographic trends in most countries forecast aging populations that will face serious labor shortages. So the younger generations should be able to leverage that into better economic outcomes. But the tricky part will be in getting around the institutional barriers that the older generations have and will continue to put up in order to maintain the economic upper hand.

That makes sense on the surface, but often times it’s not the case. Turns out in a democracy where everyone thinks only of themselves the older and more numerous generations vote for their own pensions and protections and stiff the younger generations.

People always only think of themselves, democracy or not. That's been true since the dawn of time. That's why I said the younger generations will need to overcome some of the institutional barriers. Nothing is going to be just handed to them.

This is incorrect, it is a cultural phenomenon. There has always been a balance between doing constructive things for others depending on how close they are socially and caring for themselves. You have all the emotions, you know how it works.

There are tribes where no one cares who gave birth to the kids. We did countless wars and profited at the expense of others but if you fail to account for the soldiers moral it kinda not makes sense for them to make the ultimate sacrifice. We had many religions and some political ideologies where selfishness was not just not admired but frowned upon and undesirable. Most of our quality of life comes from previous generations doing the hard work for us, often intentionally. Try starting from scratch on the "only think of myself" principal and you get something nonsensical like Liberland.

Almost everything was just handed to you. You got a good hand of cards. Almost nothing was the result of you taking care of you.

So do what the boomers did and form unions. Working together, you can collectively demand higher wages, or shit does not get done. This has been proven out in practice to work - that's why the boomers did it in the first place. Is it perfect? No. But it gets you closer to where you want to go instead of bitching about wages being too low, then following it up with American Individualism and Exceptionalism.

And overcoming self imposed barriers, like investing in crypto and avoiding equities. It will be harder to overcome an older generation that owns all the means of production.

This overlooks the fact that automation is eating jobs requiring human input *much* faster than new human jobs are being created.

Can you cite a source? Every generation for the last 200 years has felt this way, and I was taught from an econ degree years ago that historic averages turned out to be ~1.2 jobs created for every job lost to automation. Economies also tends to be self balancing which further lends credance to the idea that it’s really hard not have an employed work force. I think the bigger problem isn’t automation, it’s the way we treat capex vs opex in corporate accounting. We’d go a long way to make paying someone more tax beneficial than to go the ludite route.

(I also don’t mean to downplay the pain if displacement from automation, it’s a very real problem and a reason I’m a big fan of social safety nets)

We can only wish this is the case.

We are about to have a demographic crunch where we will have massive worker shortages. That is inherently inflationary, and we will need automation which is inherently deflationary if we want to keep the lifestyle we have.

Automation has never eaten jobs. People just do more interesting or more valuable work.

How come the number of people employed is going up and not down?

that is not possible. it's like asking a plant to thrive in toxic soil

but humans are not like plants, they move and immigrate. look at southern europe for an example. Democracy serves a bad deal to younger generations and they know it

Funnily enough, I can't guess what generation you are in based on this comment. I'd argue it's pretty bad -- but not the end of the world -- for everyone from Zoomers to Gen X.

Are we supposed to feel bad for the Americans with a crummy hand? To most of the rest of the world it sounds like if Prince Harry laments he's not in as high of a point of succession as his father was.

People are complaining that entities in their government are favoring older generations over theirs. The government should not be discriminating based on age when it manipulates the financial markets to benefit retirees over the rest of the population.

It seems more like people are complaining like "my dad bought a house and raised a family on a single income in 1970 and that's impossible now "

That's a complaint about past vs current conditions not about current conditions favoring the elderly.

The current conditions favoring the elderly were the policy decisions that quintupled the value of those houses.

For me the mistake is that the elderly aren't being favored at all, but the wealthy. The elderly are held up as helpless examples of the wealthy that need to be protected. But instead of protecting the elderly by directly taking care of them, which is obviously communism, it's important to protect the elderly by protecting the wealthy in general.

Nobody cares about the broke baby boomers. They get to work at McDonald's until they are automated into homelessness.

It’s getting to the point where it isn’t the boomers but their heirs that will benefit. The least we could do is eliminate the step up basis at death rule …

In a way though this fucks boomers pretty hard, if they didn’t invest very responsibly and have their money out of stocks in time. The stock market is down 20% this year and unlikely to recover (if you believe the idea of the article) let alone return to long-run >10% growth like previously.

Similarly we may be heading for a housing price crash at some point and that kinda screws boomers who hoped to use it as a piggybank.

None of this in any way offsets the incredibly sweetheart deal that boomers received and then voted to deny to future generations, however. Almost free college, houses that pentupled in price, a stock market that averages 10-11%, generous social benefits, etc.

That doesn’t really make sense.

If someone born in 1955 who started working in 1980 and then started saving money and investing into a diversified stock portfolio the current downturn sucks but isn’t the end of the world. Plenty of time in the market.

Sure, it always sucks if you are entering retirement when there’s a downturn (which someone born in 1955 would do right about now) but I wouldn’t even see the point in completely pulling out of stocks now.

I would say that if the prediction that returns will be lower in the future is true then this sucks for everyone not entering retirement right about now. They still need and want time in the marke

Yes, the fact that others are impoverished certainly justifies celebrating anything that helps those who aren’t join their ranks. How spiteful.

What part of my post is celebratory? I'm saying I can't really commiserate with the complainers. I'm not laughing at them though.

That's not any better, really. If you know what it's like to be impoverished (and I certainly do), it's very easy to commiserate with people who experience a substantial loss of means.

You aren't really whining, governments 20 years ago were worrying about "boom and bust" cycles but it feels like we only get "bust and bust" cycles at the moment.

We literally just had a decade of solid growth!

The current boom cycle has been juiced for so long that there’s a whole generation of working people who have no idea what a bust looks like. My wife is one of them, and when I describe to her what things looked like after 2008, she thinks I’m just trying to scare her.

given the Federal reserve handling of the 2008 crisis by re-selling those bad debts and the time they had to do that was infinite everyone had enough of a warning already that when they got to the end of that selling of bad debt the returns on all other asset would be lower as the Federal Reserve tool used implies that economic aspect.

This is why the market was turning to real estate past the 2008 crises in the first place, especially among hedge funds in particular.

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