I don’t know the answer, but during 2008 onwards (seems like the economy didn’t fully recover until the end of Obama’s presidency), every industry slowed down. Was hard for me to get a fast food job or consistent minimum wage assembly line work through temp agencies. Things can go into vicious negative feedback loops during downturns (investors afraid to invest due to bad economic outlook -> factories and such don’t get built or expanded -> unemployment rises -> people spend less -> companies start laying off -> economic outlook worsens -> investors selling and moving to "safer’ assets -> …). The entire banking system pretty much imploded during 2008; I don’t know how much exposure banks have to AI (commercial real estate is another thing to worry about though). With any luck the AI crash would be more like the dot-com crash, which mostly just hurt one industry (but I remember my father talking about factory layoffs during that too).
Comment on Everyday AI looks more like the '08 housing bubble
vermaterc@lemmy.ml 21 hours ago
So how dangerous that really is? I assume one day we’ll finally see investors saying “nah, that’s a bubble, I’m not gonna see any returns from those companies, I’m selling”. Then, stock prices will fall and some investors will loose money selling cheaper than thy bought. Then AI unicorns will start to loose funding and closing their business laying off people.
But will I, a person who do not work in AI industry and did not invest in AI companies, be affected by this?
sobchak@programming.dev 20 hours ago
Lucelu2@lemmy.zip 9 hours ago
My family lost a great deal of invested wealth in that 2008 crash with the death of Mellon Bank. It does not seem like a lot today but … if it had been invested in say Chase or G-S… it would have probably been double what it was by now. I am sure my dad was twisting in his coffin when that happened. I am glad he did not suffer that when it happened (he died in 2005).
Redex68@lemmy.world 18 hours ago
One thing people didn’t mention is that I’m pretty sure the top 10% of Americans by income make up 50% of consumption because of the heavily K shaped revovery that has happened. These Americans have a large percentage of their wealth in stocks, and if the stock market crashes, they will feel less wealthy and less willing to spend, decreasing their spending, tanking the US economy.
1984@lemmy.today 16 hours ago
Trump is a much bigger threat to tanking the US economy. He is working in that direction every day. Tariffs are horrible for the economy. Sure, he gets American factories built and jobs are created but things overall are going to be much more expensive for consumers.
Redex68@lemmy.world 15 hours ago
I agree, but that’s just another factor, and it will also cause the stock market to crash, among other things.
Also, the worst thing is he won’t get American factories to be built. Maybe one or two, but no one in the right mind is going to relocate large amounts of manufacturing to the US when tariffs are coming in and out of effect all the time. Tariffs only work for increasing manufacturing if companies believe they will last a long time. If companies think a tariff will last a month or a year, there’s no point in making a factory that will take two, three years to build and then five years to become net profitable, because by the time the factories finished and the tariffs are gone, everyone that still has a factory outside of the US will just out compeat that factory with lower prices.
Knock_Knock_Lemmy_In@lemmy.world 17 hours ago
Boo hoo. Rich people become less rich.
boonhet@sopuli.xyz 16 hours ago
And the poors lose their jobs but who cares lmao they should just eat cake
Knock_Knock_Lemmy_In@lemmy.world 14 hours ago
I call bullshit. You are white knighting the poor to protect your own ass.
Redex68@lemmy.world 15 hours ago
You do realise that if 50% of consumption disappears then a lot of people from that 90% will loose their jobs as well. I don’t care about the 10%, I also think the income inequality in the US is insane, but the fact is that if AI stocks tank right now, poor people will feel it as well (much more so than rich people, because they can’t survive without a job and don’t have wealth as a safety net)
Knock_Knock_Lemmy_In@lemmy.world 14 hours ago
You are talking yourself into trickle down economics. There is now plenty of evidence that this isn’t true.
There is no need to protect rich people’s wealth so that the poor don’t suffer
Lucelu2@lemmy.zip 9 hours ago
I think the top 10% are author of more than 50% of the spending/consumership. That is about to become larger.
teslasaur@lemmy.world 15 hours ago
Your pension is tied to these companies stocks. I can pretty much guarantee that “your” pension fund owns quite a few of these stocks.
But, and this is the important part, that isn’t your pension. It is the pension for those that are retired right now. There is no saved stack of money that you earned during your life thats waiting for you. Unless there is an equal amount of tax paying workers by the time you retire, you wont be getting that pension.
Passerby6497@lemmy.world 14 hours ago
pension
I’m not sure how old you think most of us are, but I don’t think pensions are a common retirement vehicle anymore, and haven’t been for a while. 401k would probably be the modern equivalent, and it’s still running on the stock market for the majority of its life prior to beginning to withdraw.
teslasaur@lemmy.world 14 hours ago
Pension is the correct English term. 401k doesn’t mean anything unless you’re american.
sugar_in_your_tea@sh.itjust.works 11 hours ago
Pension is the correct English term
I don’t think it is.
A pension implies benefits are distributed to the person in retirement, usually with some fixed amount per month. My understanding is that in the UK, defined contribution plans are required to be invested largely in annuities by retirement, which satisfies that, whereas in the US, 401ks don’t have such restrictions. So a 401k could be depleated well before death, or be passed on to children as inheritance, unlike an annuity. There are required minimum distributions, but they don’t kick in until your 70s.
If 401ks switched to a defined benefit plan at retirement, I could see calling it a pension. But since they’re not, I think that’s misleading, and employer sponsored plan makes more sense.
julietOscarEcho@sh.itjust.works 8 hours ago
About half of the US population is enrolled in a pension even today…
cyberwolfie@lemmy.ml 20 hours ago
Pension funds are to a large extent exposed to the stock indices. Since these companies grow and grow in valuation, a larger portion of pension funds are exposed to these companies. The so-called “magnificent seven” make up about 35% of the US stock market now. A lot of people will see a large portion of their pension savings affected by this. If you are not a US citizen, you sre still likely exposed to these companies.
InFerNo@lemmy.ml 20 hours ago
Were you affected by the dotcom bubble?
Maybe the remaining tech companies, such as Microsoft and Nvidia, might raise prices of their products to cover the losses.
umbrella@lemmy.ml 20 hours ago
nvidia cards would cost as much as a good used car.
firebyte@lemmy.world 14 hours ago
They already do.
null_dot@lemmy.dbzer0.com 20 hours ago
Yes, you absolutely will be effected.
In a general way, the plebs always do the heavy lifting - a universal truth since the dawn of time.
More specifically, your pension / 401k will lose a heap of money.
As the economy contracts there will be lay offs.
That means loan defaults, et cetera.