By Frank Shostak
Keynesians claimed that stagflation—rising price levels and increasing rates of unemployment—couldn’t happen. Then it happened time and again, something predicted and coherently explained by Austrian economists.
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So when ai bubble 🫧 bursts, thousands of companies will have priced in the use of ai vs humans
And then they'll have to find a way to continue using humans because ol' chatgpt is a no go
So they'll try and pay you less or work you harder
Which leads to higher unemployment because why tf would you work for pittance
The use of unions will skyrocket and mass protests and strikes
Interest rates are already low so raising them leads to inflation
Basically the fed is cooked right?
I don't think unions will skyrocket.
More likely is just a wave of bankruptcies for those firms that can't afford the labor they'd need. Then, all those unemployed people cut back on their spending and cause more bankruptcies.
Fed printing basically backfills the demand loss and prevents a full correction.
And the keynesian econs in the ft justifying the printer go brrr will be satisfying to read
The corrupt political strategy meetings where they just have to get to the end of the term and let the dems suffer the consequences
Stack sats and popcorn 🍿
Great visual. Captures the "worst of both worlds" perfectly: shrinking economy + rising prices. Classic consequence of monetary inflation distorting production. Feels very relevant today