I think you may have missed the most important difference. Both President Hoover and the Federal Reserve reacted by tightening monetary and fiscal policy. Their intentions were good, Hoover wanted a balanced budget and the Fed was attempting to defend the US Dollar peg to gold.
The unfortunate and unintended consequence was that the policies sucked all the oxygen out of the room and extinguished the flame of the economy.
This time, building on what Chairman Bernanke started, we are doing the opposite. He advocated for QE, and loose monetary policy.
My personal opinion is that this will not end well, but may take up to a decade to come to it’s natural conclusion.
While my understanding of economics and QE is basic. Printing money won’t make up for lost opportunity and produce which will come out of this. Does “unlimited QE really work ?”
In my view governments are way too focused on the economy as it is / was rather than innovative solutions and investment into transitioning into something new and more resilient.
You’ll often here Trump saying “reopen the economy”. “The economy” he knew is gone. It’s changed forever, time to evolve.
I’m going to say that what contributed to getting us out of the Great Depression was (amongst other things) was that humans better adapted to that environment.
QE "works" because it keeps wealthy investors wealthy, and they're the ones funding campaigns and hiring people like Bernanke after they retire from government.
It works for the people making the decisions, and the people funding them, so you bet it's going to continue happening even if it means the American standard of living will continue to drop.
Most of your differences involve just creating money out of thin air more. I don’t see how that will fix it.
What it reminds me of most are things like assignats before the French Revolution. But at least those were said to be based on something (seized church land). We make our money up based on nothing right now. It’s absurd and after it all falls it will seem so obviously stupid to historians.
Modern recessions aren't like famines, where there simply isn't enough stuff to go around. We have plenty of stuff, our productive capacity is still available, and the problem is just getting it allocated properly. Magic money creation based on nothing can help with that kind of problem.
I'd love to see poor people have more money, but I don't see why that's a critical feature for a plan to keep the economy running well. There are many important problems that just don't have much to do with income inequality.
The economy only works when everyone has money to spend. If 30% of the population is broke, that's going to cause a huge drop in economic activity. Most economic activity is driven by consumer spending.
The way you fix that is by redistributing wealth. The government is doing this in a roundabout way by borrowing the money for a massive stimulus and recouping that money by increasing taxes on the wealthy later - likely with a Democrat administration so Republicans can maintain their rhetoric.
Would you please stop posting in the flamewar style to HN? You've been doing it a lot lately, unfortunately, and it's not what this place is for. In fact it destroys what it is for, so we ban accounts that do it. This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html.
Yes yes, I understand, it makes sense that y-combinator has an imperative to protect the narrative that VC and big corps are good for America. Thoughtcrime is a serious offense, I'll just delete my account, no need to ban me.
edit: Oh... seems I can't delete my account. Nice feature!
Just reading through all my flagged comments... seems like calling out any sort of inequality in America or pointing out unjustifiable valuations for companies like Bird, WeWork, Uber, etc. is "flame baiting." I was half-joking when I said "thoughtcrime," but that really does seem to be my offense.
It's now starting to make a lot more sense as to why HN is the way it is. Average people don't really think this way, but rather HN bans people who suggest VC wastes a lot of money on pointless ideas, or that there is a massive class divide in this country and that some people are very out of touch with how the average American lives...
Guess this is just the world we live in now. There's no place for free discussion, you just have to choose which echo chamber you want to live in.
Plenty of HN users post about all those issues without difficulty, and the idea that HN bans people for criticizing VCs is just silly; criticizing VCs is the house special. The issue is ideological rhetoric, internet ranting, and other forms of flamebait. We don't want that because it leads to shitty flamewar threads that are all the same and drive away the best users. On HN, the idea is: if you have a substantive point to make, make it thoughtfully; if you don't, please don't comment until you do.
I know that when your comments are moderated, whether by users (through downvotes and flags) or by moderators, the temptation is to feel like you're being suppressed because of your views ("thoughtcrime" is a common term; "groupthink" is another). But if you read the site guidelines at https://news.ycombinator.com/newsguidelines.html and think sincerely about the intended use of the site, you'll soon notice how your posts have been breaking that.
In terms of helping YC's business interests, our imperative is simply to try to keep HN a good place for curious conversation on the internet. That's what keeps the community happy and what keeps the best users—the users who come for intellectual curiosity, not smiting enemies. A happy, high-quality community is by far the most valuable thing about HN [1], so it wouldn't make sense for us to optimize for anything else [2]. That's one reason why we moderate HN less, not more, when YC or YC startups are the topic [3].
Is there a public log of comments and users that have been banned under this policy?
Just looking at the comments you responded to in those searches, they all seem to slant one direction -- stating that HN overmoderates anti-VC rhetoric. I can't find a single person on the other side complaining, so it seems to just prove exactly what I was saying earlier.
Can you find a single example in your moderation history where you called out an anti-Democratic Socialist comment for flamebaiting? Or where you found someone deriding wage workers and their inability to climb the economic ladder? There are plenty of these comments on HN, at least as many as the opposite, and yet I can't find one comment in your history that responds to them.
Is it possible that your political bias is affecting your moderation? Have you become the very thing you sought to destroy?
I can point you to plenty of comments complaining that the site and mods have an overwhelming political bias in direction $whatever-you-want. Not sure if that's what you're asking for.
Yeah that's exactly what I'm asking for, please point me to any comments that you have responded to (like you responded to me), where the comment was defending American capitalism or deriding Democratic Socialist concepts such as UBI, universal healthcare, etc.
Sorry for the delay. I don't keep track of the moderation comments that way but I guarantee you that there have been hundreds of such cases. Since we moderate posts that break the site guidelines, and both sides break the site guidelines a lot, we end up moderating both sides. The irony is how much they have in common. Mask one or two bits and they come out pretty interchangeable.
What I do collect are denunciations of how ideologically biased the mods and/or community are. I'm fascinated by the conviction with which people spout them, and (like I just said) how interchangeable they are with their opposites.
All: if you're finding yourself agreeing with these comments, please don't miss the point: there's another passionate litany of complaints in the opposite direction. Elsewhere I have posted opposite lists of links.
What's actually going on here is cognitive bias: people place tremendous weight on the cases they run across and dislike, and skip over the cases that go the other way (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...). Since HN gets millions of comments a year, and thousands of posts by mods, both sides have lots of material to select from.
> but I don't see why that's a critical feature for a plan to keep the economy running well
Wow, I knew HNers were "affluent," but I didn't know they were this out of touch. If the people buying the iPhone you're coding software for die of starvation or due to lack of access to medical services, where do you think your salary is going to come from?
> There are many important problems that just don't have much to do with income inequality.
You're attacking something I didn't say. It's very bad if people die of starvation or can't get medical care, and bad for much more important reasons than whether or not they'll buy things.
Business closures, for example, are a problem that doesn't have much to do with income inequality. Redistributing wealth won't stop businesses from closing, nor will it produce the goods and services those businesses previously made. If we get more money but lose the goods and services we wanted to buy with that money, it's not a good trade.
> I'd love to see poor people have more money, but I don't see why that's a critical feature for a plan to keep the economy running well.
That kinda is what you're saying, because if poor people don't get more money during this crisis, they're literally going to start starving. 50% of Americans live paycheck to paycheck, and now their paychecks have stopped, how are they going to eat?
> Business closures, for example, are a problem that doesn't have much to do with income inequality.
Of course they do, who do you think spends money at local businesses? If we're talking pre/post pandemic, if you give money to poor people they spend it. That means more people spending money at local restaurants in poor neighborhoods, more people spending money at daycares, more people spending money on car repairs, etc. That's how businesses flourish -- when people have money to spend on goods and services.
What do billionaires do with their money? Spend it on private jets, expensive cars, and invest it in companies like Uber and WeWork? The vast majority of poor people can't even afford an Uber, so how is that helping the average American?
If you give poor people spending power, then the market that supplies their needs grows because it has more customers. What should we do, prioritize the needs and wants of 1% of society, or 50%?
When minimum wage stagnates, so does spending. When the stock market stagnates, does it even affect the average American? So why are we prioritizing the stock market over minimum wage? Is it maybe because of regulatory capture by the ultra-rich?
The economy should not be a funnel for money to get vacuumed up by the top 1%, but 50% of all dollars end up in their hands. Why is that? Why does 1% of society get half of all wealth while the other 99% of society has to fight over the other half? How is that good for the average American?
Why is it that when we're having trouble with the logistics of getting food to people, we're bailing out the airline industry? No one needs to go on fucking vacation right now, we need to get people the food and medical services they need. The only reason is because the only thing that matters in this country is how many dollars are in your pocket, and the starving poor have less than airline executives. It's pathetic.
I'm not an expert but I don't think our money is based on nothing. As I understand it it is based on the relative debts and wealth of other nations [0].
By definition, fiat currency is literally based on nothing. Or, more correctly, fiat currency is based on a shared collective delusion that it has 'value'.
It will fix it by making all of us pay the bill. In the long run QE will lead to nothing but inflation. In the beginning you may not notice it, but then after a while you will start asking yourself, why is real estate so insanely priced. And then medical care, cars etc. And while a single/small country can't do QE for far too long before going into hyperinflation and people resorting to another currency / currency board, FED+ECB can actually go much longer. Scale matters. On the moral side though, I find it quite totalitarian an non-democratic to do QE at such a scale and in such away. Just ask yourself where the newly created money supply will be poured into. I bet the SMBs won't see much of that.
Why the downvote? I am not being emotional. Just want to understand which of the things I mentioned seem incorrect.
Here is already some indication about the money NOT going to the SMBs.
There was actually a surplus of food in the 1930s, but farmers decided to burn their crops instead of selling it at a discount. Kind of like the current situation with oil: a massive supply glut.
When I read greatest recession since 1929, I don’t read it is going to be like 1929, I read it is going to be worse than 2008, where are the tools you mention were already there.
yes and assets started to bubble because of the hidden inflation of QE. What do you think it'd going to happen by just keep printing money, 10% to normal people and 90% to businesses ?
* Greatest downturn since the depression doesn't imply the mechanics are the same. It's a comparison of scale.
* Unlimited QE isn't free. TINSTAAFL.
* The stock market is not the economy.
* The economy isn't the US economy (it is global)
I'm a proponent of what the Fed, and central banks around the world, are doing. But I feel like people are viewing this as a "pandemic passes, back to normal" situation. There were cracks beginning to show in the late cycle of the economy for over a year. The pandemic just happened to be the exogenous shock, and a bad one at that.
Remember, we just got through a decade long bull-market that mostly benefited the asset-rich classes. We have unbelievably polarized politics around the world. There's evidence of corruption in all of our institutions. Are we really ready to handle this?
That has nothing to do with People up and down the food chain, who know how to get things done and take advantage of the hyperconnection, rebooting their ops.
The advantage of the network over hierarchies, is reboots dont happen top down. They happen all over the network simultaneously.
For example these days I don't wait for my boss or his boss to resolve gating issues if I know people at their levels of the hierarchy who can do it faster. Thats possible if you are well networked. And lots of people are these days, compared to 1930.
* unprecedented scale and speed of QE and government stimulus
* the Federal Reserve has stated they will provide "unlimited QE"
* the markets are a lot more efficient now than they were in 1929
* in the 1930s, credit and banking was, in many ways, still in its infancy
* today's widely available technology was science fiction in the 1930s
PS: There's an interesting documentary on YouTube about the Great Depression, part 1: https://www.youtube.com/watch?v=bCEJ65H_1XE part 2: https://www.youtube.com/watch?v=gO42ZfCN9ug. It's worth watching if you want to understand what happened in the 1930s.