Why Aren't We Partying Like It's 1999? – Paul Krugman

paulkrugman.substack.com

22 points·rbanffy··5 comments

This might come as a surprise to many economists, but the economy is simply not everything that makes for a good life.

If economic growth would be all that counts, countries like China, Saudi-Arabia and even Belarus would be better places to life in:

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

GDP and GDP per capita are really bad metrics. Both are blind to inequality, which is a very important indicator for quality of life. You don't want to be rich in the middle of abject poverty.

> But while we haven’t (yet?) seen mass layoffs, the labor market is weirdly frozen, probably because of uncertainty created by Trump’s erratic policies.

It's actually probably because people are thinking AI is going to be more useful than junior hires. The thing "bouying up the economy" is at least in part the thing causing the effects the AI is "masking".

Fairly sure it's both and more. We're in a constant crisis cycle the world over. It's very hard to make bets on the future right now. Steady state predictability is the sought after commodity.

The people pushing this bubble themselves live in a bubble in a bubble in a bubble, so many layers deep it's impossible to tell what they are thinking if anything when it comes to ETFs.

So I don't see any reason for correlation here, but it not like either index nor their relationship are any indication if the AI bet will actually pay off

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