seriously ! everything in life is cost / result equations .... it might be easier for some than others to start a company (network, location, background, experince, timing, team, intelligence ...) but everyone pays something in exchange for a result.
your emotional labor as a founder is clearly a huge one, you should be aware of it, but the article is foundementally ignoring that fact that there is a price for everything.
we all so the "pasty" elon musk ... it's not that it's the only way to build amazing things and so many people look that way playing video games ....
my point is, anyone wants to build something and not pay for it (emotionally, financially, reputation ....) is just unaware what the word build means.
usually you're right but the cost mentioned here is specific to BLOB data storage ... a very specific problem that can be isolated and run on external services and save the company lots of money.
The cloud vs. on-prem argument often seems to ignore the (enormous) middle-ground. Just because one portion of your architecture would do well to be run outside the cloud, doesn't mean you take out all the other parts you don't want to deal with yourself. Furthmore, "on-prem" might mean in your building, in someone else's building co-located and you rent space and control it, or in someone else's building where they deal with most hardware, etc.
That said, maybe Canva has considered a non-AWS solution and decided against it. Or maybe they've gotten certain better deals from AWS. We can't really know for sure on the outside.
My team uses AWS for _everything_. There's three reasons for this on our team (and I've researched it for our use cases.
- Consistency. Instead of saying "Oh look in AWS for this app, Azure for this one, and hetzner for this app, except it's test env is in AWS", it all just lives in AWS. It massively simplifies docs, onboarding, and reduces the amount of one-person specialised knowledge.
- Engineering Costs. Similar to above, but in terms of engineering, there's less to know and understand. Instead of needing to know how the AWS load balancer routes/connects to a VM somewhere else, and how that VM gets it's blob-storage-data from azure, we only need to understand AWS concepts.
- Vendor Lock In. Yeah, it's there. If we have a service that uses data from S3, there's egress costs from S3 to <other provider>, but not with EC2. We've consciously accepted this lock in for the time being.
Now, we're a 50 person company so YMMV, but the above tradeoffs plus an "opinionated" setup in AWS (everything on ECS, logging to Cloudwatch, RDS for DB) drastically reduced the "ops" overhead on our side after the initial setup. If I started over, I'd make the same decisions again.
> - Vendor Lock In. Yeah, it's there. If we have a service that uses data from S3, there's egress costs from S3 to <other provider>, but not with EC2. We've consciously accepted this lock in for the time being.
This is where I think the FCC should take action.
To the extent that this issue is a mutually agreeable arrangement between you and Amazon, it seems obnoxious but does not seem like it rises to the level where regulators should take action. But it affects third parties too: specifically, it prevents non-AWS-hosted vendors from effectively marketing their services to you. In that regard, I think the FTC should try to put a stop to this. AWS should not be permitted to effectively subsidize its and its partners’ services over outside competitors.
(And the US Government should never have accepted cloud deals with excessive egress costs. Part of the bidding process should have been a requirement for networking outside the winning provider to be priced competitively with internal networking)
But you're missing the point above. S3 is probably the easiest service to replace - there are loads of providers which use the _exact_ same protocol as S3. It's a drop in replacement. It literally uses AWS concepts, there is nothing else to learn apart from putting a different url into your application.
Very few people should really be using S3 at any serious scale is my thoughts. The cost savings are enormous (plus cloudflare for example replicates your data a lot closer to users for no extra cost, significantly improving performance). The cost savings can be absolutely enormous for very little/no additional complexity given how many providers are compatible with S3, and the fairly 'boring' nature of S3 compared to other technologies.
People really have to be afraid of running VPS or whatever if they can't spun up a min.io instance to have their own S3 without dealing with Amazon's Bullshit
Point taken as I haven't used it in prod properly, I'll cross that bridge when I find it but Id rather keep my money and put some time into making it work. There's also cloudflare R2 now if S3 is too expensive but self-hosted is out of the question
> My team uses AWS for _everything_...If I started over, I'd make the same decisions again.
Okay? I never said that sticking to a single cloud provider isn't appropriate for some (or maybe even most) people. It's good that you have a setup that you believe works well for you.
I'm really surprised how entitled people are if they never learned how the public market and invetments work.
Investors expect that a stock would return it's value in dividents or the company will have a very likely positive future outlook, intel doesn't have the second (lots of debt, lots of capital required to stay compatitive and high interest rate).
letting go of employees for intel is only logical and they should keep doing it until they start seeing positive returns to their new investments.
I spent about 10 hours one day trying to convince my professional artist friend that AI could produce legitimate works of art, against his insistence that they could at best produce "kitsch" collections of art-like patterns, the kind of stuff that belongs on the wall at malls and not being discussed by academics in galleries.
I have to say that, although I still disagree with him, I was unable to get GPT to produce midjourney prompts which I would consider creative. Even when I prompted GPT to take the perspective of a known artist, it produced an endless series of banal landscapes, cliche compositions, overplayed metaphors, and insipid imagery.
Midjourney only really accels when a human is involved with the prompting.
I had to concede to him at the end of the discussion that /today's/ AI are not creative.
I firmly believe though that the inclusion of all mankind's perspectives possesses the raw material to generate creative ideas. My understanding is that current AI lack the ability to "turn off" the vanilla oversaturation of averages that pervade when you are exposed to all stimuli. One day, perhaps soon, there will be AI able to combine ideas they are exposed to without trying to combine ALL of the ideas at once.
not really, Joe Rogan pre pandamic was still the best interviewer in my openion of smart people.
the problem with smart people is that they know that they're smart and so they won't stop talking or driving the conversation.
Joe Rogan, pre pandamic / spotify deal was humble enough and would just invite people and let them talk, it was way more informative and less echo champery style of conversation ... I can't stand listening to this guy.
wrong view / comparios ... in a 5% interest rate environment, companies fight for investors money .. if you don't do the cuts and find a way to be efficient investors will put their money somewhere else that's more profitable.
this reasoning is pure and simple and correct, you start from the top, not from the fact "they can afford it" because their job is not to spend the money they have their job is to increase value for investors.
Let's do a little root cause analysis. Why do companies like Google, Microsoft and Amazon, with massive income streams combined with substantial cash holdings, need investor money? Maybe Toyota's "Five Why's" can shed some light on it.
We need to fire thousands of people.
Why?
Because it will make us more attractive for investors.
Why?
So they put their money in our company.
Why?
Because that will buoy our stock price, which is important.
However, until now, it has been my understanding that the way any large company works is by using their stock value as collateral against short term investments from banks, which then serve as operational funds.
You might have seen that in the crypto space, but no normal bank is going to work like that: the only point at which collateral becomes relevant is if the debtor can't pay the loan back, i.e. they're bankrupt, in which case the equity is worthless. Corporate loans will be either unsecured (companies have lots of unsecured short term debt: every single invoice sitting unpaid in accounts payable is a debt!) or secured on something physical in the way that car loans and mortgages are.
You occasionally get debt-to-equity swaps in near-bankruptcy situations.
There was a certain amount of "borrow against funds held in Ireland to avoid US repatriation taxes" done by Apple, but that wasn't using stock as security, that was using cash of a different subsidiary.
According to other comments, while the above above holds true for some companies, this is not the case of FAANG. Unfortunately, it is apparently too late for me to edit or delete my comment, so it shall remain posted on HN for all eternity.
Yeah, most of these companies park their cash outside the US to avoid having to pay taxes, then borrow money in the US against their assets/stock. It worked great when interest rates were essentially zero. Not so much now.
But the b2b sourdough app is a potential driver of future growth. Yes it may help the bottom line today, but getting rid of employees today lowers future growth potential.
Investors know this. Investors would also question why there are layoffs in an apparently healthy company. All this means that CEOs don't want to do mass layoffs which even more strongly raises the question of why they did it to start with.
When the executives start co-opting the language of hedge fund managers while refusing to answer whether the open letters from hedge fund managers prompted the layoffs, the answer is pretty clear.
Who else uses the term "right-sizing" and considers how being laid off "provides an opportunity to build resilience"?
There exist large private companies; how do they behave differently? I could imagine it going either way, depending on the owners, employees, and all kinds of other factors.
The median shareholder in Microsoft, Google and Amazon is likely a lower economic class than the median employee at these corporations if I had to guess.
The framing of ordinary workers getting the boot so fat cats can buy bigger yachts is seductive but I can just as easily frame it as:
Fixed income, middle America boomers entrusted these companies to be good stewards of their capital but it was instead spent on paying high six figure salaries to coastal city professionals from elite schools to do work of dubious value.
This is such a poor faith argument that completely ignores any reality. These companies have had a massive last decade or so, and if what you're saying is really the case, then we would see booming levels of wealth in middle america among the elderly. Instead, we see most wealth going to the richest of Americans, with the lions share of wealth created during the last 2 years of resurgent economic boom going to the top 1% of Americans, not the fixed income middle america boomers who are currently dying because they can't afford to keep living on social security.
> we would see booming levels of wealth in middle america among the elderly.
I'd be interested to see evidence but I suspect we did see this? Retirement portfolios and housing prices (where the majority of elderly wealth is) ballooned.
> Instead, we see most wealth going to the richest of American
The elderly are the richest Americans so this is consistent with the elderly getting wealthier.
Retirement accounts are largely a benefit enjoyed by those well-enough off to have them [1], as well as owning a home. So while yes, these indicators have increased, it only speaks to how the bulk of wealth created since 2008 has gone to mostly well-off individuals. And while yes, wealth is overall heavily weighted to older generations, it does not change the fact that the only people who are rich are the rich, regardless of age. While most wealthy people are boomers, most boomers are not wealthy. If you look at economic insecurity (200% FPL), the elderly in America are over-represented, with a rate of about 33% compared to ~27% overall[2].
Your analysis doesn't match the economic measures I've been reading, which indicate that lower income workers in the US have seen real wage gains and that homeowners have seen net worth increases, and are feeling wealthier. Unemployment is very low, despite the recent layoffs, and many categories of employment are still seeing upwards wage pressure.
Social Security is pinned to inflation, so I don't understand why those living on Social Security payments might be in different circumstances now than 5 years ago.
I have no clue where you're finding that lower income workers are experiencing any real wage gains, let alone at a significant rate. Home ownership as a percentage of population has never recovered anywhere near pre-2008 levels, so on behalf of myself and most people in my generation and cohort, I couldn't care less if homeowners have more money, that fact is having less of a bearing on our real world with each day. And yes, social security is pinned to inflation so their situation hasn't changed much in 5 years, you're right, most elderly people in america are dying poor and increasingly alone in nursing homes seeking to extract profit from them. None of these points have anything to do with my original point, which is that since the 2008 recession, the tech industry has seen a massive influx of money, and to try and argue that the money put into that industry somehow makes it back to middle america because of some made up idea of who shareholders are is a bad faith argument, and ignores any reality of the situation. I have no idea what it is with people like you who just want to die on the hill of nothing being wrong and that we just have to keep doing what we're doing. A better future is possible, and only if we all start believing it is.
"The labor economist Arindrajit Dube has estimated hourly wage changes — by decile rather than quartile — over a longer period, since the beginning of the pandemic recession. He finds that real wages for the bottom 40 percent of workers have actually increased".
While yes, real wages for the bottom 50% have increased according to FRED data, that trend only appears if you look at data from 2020-2022. If you look a little further back, to about 2008, you'll find that real wages for the bottom 50% has grown at a much slower rate than those in the top 50%[1]. This also all ignores that percentages are deceiving when looking at small windows of data, and only suggests how current situations may compare to previous situations, not the overall situation someone is in. Many of the people in the bottom 50%, and especially as you get into lower deciles, have not been in a good place for a while now, and while real wage growth is great, it does little to truly improve their situations (remember, percentages result in a lower actual value when your starting value is lower). If you really wanted to make this argument, then you could pull up net worth data that shows a 110% increase from 2020-2022 for the bottom 50% compared to only a 27% increase for the top 0.1%, but then someone might show you a graph of the data and ask for you to point to the 110% increase[2]. I don't know what it is with weirdos online trying to cherry-pick data to try and prove poor people aren't poor, but it's really getting old.
Edit: also interesting to point out that 2020-2022 has included things like direct-to-citizen stimulus checks, and large government investment in the form of the build back better package. If anything, it is a testament that direct aid to people struggling does more to improve their immediate situation than any other solution proposed by neoliberals and the GOP. If that is your argument, then I will agree with you, and say we should do more, like a UBI and increased taxes on the wealthy to start to undo decades of socioeconomic stratification.
I wasn't arguing for a particular point, but I do happen to advocate for basic income policies funded by progressive taxes.
> to about 2008
I must have overlooked that you were talking about a longer time period than the pandemic. Most people recently have been discussing the stimulus policies and correlated (not necessarily caused) inflation. There's been a trend of saying they were counter-productive for lower income households, which is not supported by FRED measurements.
From my original comment, my statement you took issue with was
> Instead, we see most wealth going to the richest of Americans, with the lions share of wealth created during the last 2 years of resurgent economic boom going to the top 1% of Americans
which is a very substantiated claim[1]. Your counter argument was that in the same time frame, the bottom 40% have seen real wage gains. My counter to that argument is that while it is true, it still doesn't reflect where most of the money is actually going, and is a disingenuous argument that makes the situations of the lower 50% seem better than it is. I never argued that stimulus policies were bad for lower-income households. Not sure what point you're trying to make to me.
> Not sure what point you're trying to make to me.
I wanted to add nuance to the statement about most wealth going to the top. The last two years have also been great for (some groups of) poorer Americans. Real wages had been going down since the 1970s. Now, up (for some cohorts). Unemployment is down.
The world has detail.
If I had to make a point, I suppose it'd be that summaries can be misleading. But, I'm not interested in engaging in a debate of points and counter-points. There's no judge here, awarding victory and speaker points. I suppose upvotes are tracked, but we've moved off the front page. Not so much traffic to give us a sample.
> If I had to make a point, I suppose it'd be that summaries can be misleading.
Then I guess I have to agree with you, when discussing where wealth went during 2020, and the state of the lower 50% of Americans, it is misleading to only point out that the lower ~50% experienced wage growth without also pointing out that a majority share of overall wealth still went to the 1% and that the real gains have still not caught up with the terrible situation they've been in for years. As for the original point, the claim that the majority of wealth created since 2020 has gone to the 1% is not made any more nuanced by including that real wages have increased for the bottom 50%, as all it does is distract from the actual issues at hand.
On the contrary, noticing that real wages increased for the poorest 40% may motivate policies like a universal income / citizen dividend. Perhaps a higher steady state inflation is necessary, 4% instead of 2%, to keep unemployment low and real wages rising for the poorest.
Have you considered what happened to the wealthiest 1% as inflation fears led to increased interest rates? I'm guessing the nominal wealth declines affected the wealthiest most of all. I haven't seen measurements of that, yet, but I have seen some headlines about Musk and Adani.
> On the contrary, noticing that real wages increased for the poorest 40% may motivate policies like a universal income / citizen dividend.
Its an interesting argument but it has already been seen in America where neo-libs and the GOP have shifted most of the blame for inflation to the stimulus checks, so I doubt it.
> Perhaps a higher steady state inflation is necessary, 4% instead of 2%, to keep unemployment low and real wages rising for the poorest.
The only way I could see higher inflation leading to higher wages is worse material conditions leading to more workers fighting for higher wages. Unless there's some weird economics at play, I don't see any other reason why inflation would increase wages, and if that is the reason, I'm not going to support any platform that only works because it increases misery.
> Have you considered what happened to the wealthiest 1% as inflation fears led to increased interest rates?
Yes, they saw a small adjustment in net worth down 7% at the beginning of 2022, although that seems to have flattened out since then, and real wages have only increased since early 2021, when they fell ~1% in Q1 2021. I'm not sure what you'd do with this, because increasing interest rates reduces inflation, which works against your (since you don't like the word argument) idea that we should keep inflation higher.
Nominal wages are a part of inflation, so there's nothing about the inflation rate that inherently changes real wages. If all components of inflation increased uniformly, purchasing power would stay constant. Inflation is only a drag to the extent that it's surprising.
However, there seems to be a relationship between inflation and unemployment. It's been cloudy, but the hypothesis is that low unemployment causes higher inflation. I further conjecture that sustained low unemployment flattens the income curve, leading to higher real wages at the low end.
Regardless, low unemployment is a good thing in its own right.
> Nominal wages are a part of inflation, so there's nothing about the inflation rate that inherently changes real wages
Again, no they aren't, the only link would be that inflation worsens material conditions, which could lead to more people seeking higher wages, which overall improves wage conditions. The only "link" we've seen is recently, and even looking just behind the 2020s you can find inflation causing real wage decreases [1].
> If all components of inflation increased uniformly, purchasing power would stay constant
"If" is doing a lot of heavy lifting here.
> Inflation is only a drag to the extent that it's surprising.
Tell that to people who are un-banked, working minimum wage, or really any average person and see what their response is.
> However, there seems to be a relationship between inflation and unemployment.
Not sure where you're seeing this, and its hard to try and claim, as we are just now reaching pre-2020 levels of unemployment, not some mythical low level of unemployment. I could see an argument for lowering unemployment leading to higher inflation, but a stable low unemployment has shown no bearing on inflation.
> I further conjecture that sustained low unemployment flattens the income curve, leading to higher real wages at the low end.
Thats a nice conjecture, but again, just look right before 2020 to find the perfect counter argument, and data coming out from the end of 2022 is showing the opposite[2], that as U6 has reached an all time low (which I will say is not too shabby), real wages have started to slow their growth.
> low unemployment is a good thing in its own right
I know I'm probably starting to seem combative here, but again, this just isn't always true. For the overall state of our economy and the safety of the wealth of the richest, maybe, but on one end of the unemployment chart it speaks to less people being able to make it by without jobs. Employment among people with disabilities is at its lowest[2], which speaks to our societies inability to care for those who need it. People with disabilities are not going out and finding jobs because bagging at a grocery store is fulfilling, they're doing it because they can't afford not to.
On a different note, I'm really not trying to seem combative, and I hope you're enjoying our fake online discussion as much as I am.
The discussion is real enough for me. However, lacking knowledge of the interlocutor brings a few problems. It's hard to know what shared knowledge and context we have.
One difference in terms that we're having trouble with is "inflation". When I spoke of "inflation" previously, I meant it in the general sense, not specifically consumer goods prices, or some other subset of prices. By definition, that means that nominal wages are included. The price of labor is just another price that inflates along with everything else. Note that the chart you linked [1] says "CPI inflation" rather than simply "inflation".
As for the relationship between unemployment and inflation, it's in a standard economics textbook. Unfortunately, the evidence for the theory has been somewhat mixed.
When I'm speaking of inflation, I use the generally accepted definition of "a general increase in prices and fall in the purchasing value of money." This is why in the US we use CPI (and sometimes PCE) to measure inflation, it allows us to track how the prices of goods change, and through that we are (theoretically) able to track what the actual inflation rate over time is. Inflation in the macro sense can come from many places, but in general it is accepted that while wages _should_ keep up with normal inflation of 2% or so in America, that inflation eats away at stagnant wages, and has little direct effect on its own over wages, as evidenced by looking at average wages vs inflation, even in 2022 where the bottom 50% experienced their real wage growth[1]. "Price of labor" is much more theoretical in modern america, as there are many regulations that affect it, along with the much decreased bargaining power of the average worker since the decline in union membership, along with the fact that the average person anywhere in the world is not going to ever "buy labor", its a price that corporations set themselves and pay exclusively, and is therefore already fairly detached from any inflation (yes, I understand that corporate spending is still spending, but that argument starts getting a little trickle-down). As I said before, I can see there being a link between inflation and wage rise, but I still don't see where the root cause could be other than material conditions worsening leading to people fighting for higher wages. I guess in a "we need to fight more for ourselves" sense this isn't terrible, but I think we need to move away from a system where the way to progress is through misery.
I will say I was incorrect about the standard view of the relationship of unemployment and inflation, and that historically there has been (and it makes sense for there to be) a link between high inflation and low unemployment. Again, though, there are several ways to look at this, and it depends on where you think the driver of inflation is. If you (informally) believe that inflation comes from supply-side, then its pretty easy to explain the current inflation as we have consistently seen breakdowns in supply chains that have consistently led to lower supply. For demand-side inflation I think an argument could be made there, as with direct-to-consumer stimulus there is more money (along with the same amount of money going into PPP loans for buisness-owners), but looking at real disposable income[2], we are just reaching pre-2020 levels (aside from some very obvious spikes where stimulus checks were). Without extra disposable income across the board, I'm not sure where the extra discretionary spending would come from to increase prices. According to the NY Fed, the inflation was mostly caused by the demand shock (specifically) when recovering from early 2020, and supply-side issues[3].
For more context, I do fancy myself a bit of a work-abolitionist and am horribly left, so it is definitely coloring my takes, but I hope I'm providing enough data for my claims to counteract my inherent bias.
That Brookings article starts with, "Inflation refers to changes over time in the overall level of prices of goods and services throughout the economy." Services includes labor. The Bureau of Labor Statistics publishes the Employment Cost Index (ECI), which may be even more influential on the Federal Reserve Board's interest rate decisions than the Consumer Price Index (CPI).
The general public are consumers, so it's plausible that the "generally accepted" definition of inflation considers mostly the CPI. However, many generally accepted things are incorrect. If we're having a more technical discussion, it's reasonable to use a more technical definition. Perhaps best to be specific, saying "consumer price inflation" and "employment cost inflation" rather than simply "inflation" with no modifiers.
Notice that recent news about inflation has been deceleration of consumer prices. Most importantly, of rent, the largest component of the CPI. If the FRB were only concerned with that, they'd probably not have voted to increase the interest rate on Feb 1st. I'm guessing they had access to unemployment rate numbers from the BLS, which published a surprising job growth report today.
> people fighting for higher wages
My "fight" has been quite easy. I simply ask for it, or go get a different job that pays more. Of course it's not so easy for some people, but over the last couple years I've heard anecdotes from many business owners moaning over their employees' demands. "I just can't find any [qualified people that accept the wage I paid last year]." A friend of mine, an hourly worker, got an 18% raise in January!
The idea one might believe in either supply-side or demand-side causes of inflation and not both is strange to me. First, the primary driver of inflation in the long run is monetary policy. That's not controversial (among economists). Whether to consider price changes due to supply and demand as inflation is trickier, especially because those causes are so difficult to disentangle from monetary causes. Second, in considering short-term price changes due to the balance of supply and demand, they're clearly both important for almost all goods and services.
No. "In classical economics, labor is one of the three factors of production, along with land and capital. Labor is often defined as the physical or mental effort exerted by human beings in the production of goods and services. In neoclassical economics, labor is a broader concept that incorporates all human activity that adds value to a product or service"[1]. And while the ECI does exist, and is used by the fed to inform inflationary policy, it includes all costs of employing someone, indicating inflation in the health care market just as much as in wages. Labor is known to be much more of a reactive market[2], and also much more affected by things like the labor participation rate than inflation on its own. Even your original source for real wage increases uses the CPI. It also makes sense to use a measure of consumer inflation when talking about wages, as again, most consumers aren't buying labor.
> If the FRB were only concerned with that, they'd probably not have voted to increase the interest rate on Feb 1st.
Yes because the FRB is concerned with large scale monetary policy, and only have a few strings to pull. Interest rate hikes are intended to slow monetary velocity, effectively decreasing money supply, and has nothing to do with the housing market.
> Of course it's not so easy for some people
Bit of an understatement
>but over the last couple years I've heard anecdotes from many business owners moaning over their employees' demands
And? Anecdotes aren't sources, so I don't know what to do for ya here.
> A friend of mine, an hourly worker, got an 18% raise in January
That's awesome for them! It doesn't change that its anecdotal, and doesn't change any of the previous data that I've included to show that at best the lowest 50% are just starting to reach and surpass where they were in 2000.
> The idea one might believe in either supply-side or demand-side causes of inflation and not both is strange to me
I never said it was one or the other, and even linked to sources that included a breakdown of the share of each. I was more speculating on the driver of the higher than average inflation since 2020, and included fed breakdowns that gave evidence for a good amount of supply-side inflation, whereas most American pundits tend to cast it in a demand-side only light (people have more money so they spend more kinds of arguments). I even pointed out where it was demand-side in the fed report, although they show that it is not more people with more money, but an effective contraction (from reduced monetary velocity) and subsequent rapid inflation of monetary supply following COVID.
>First, the primary driver of inflation in the long run is monetary policy
I really need you to pick a time frame. I thought we were arguing inflation for 2020s. Yes obviously monetary policy tends to have the most influence in the long run. I also don't think anyone would say that inflation in the 2020s has been driven by monetary policy, and in general it isn't in times where its higher than what is wanted from monetary policy, like what we've been experiencing.
We're largely talking past each other now. I find myself repeatedly trying to make a distinction between inflation in general and consumer price inflation specifically.
Consumers may not often directly buy labor (though it feels otherwise as a homeowner seeking a handyman) but the cost of labor matters nonetheless.
There are many people who might blame inflation in the 2020s on quantitative easing, which is a monetary policy.
It's interesting that you're going with a "classical" definition of labor, but not one for inflation, which would classically be defined as purely a monetary phenomenon independent of price changes due to supply and demand.
> I find myself repeatedly trying to make a distinction between inflation in general and consumer price inflation specifically
The issue I'm having with the distinction you're trying to make is that you're also trying to argue wages, which is only helpful in the context of consumer price inflation. Consumer price is also the best measure we have of inflation, since it is the only measure that is widely available and open to the public.
> though it feels otherwise as a homeowner seeking a handyman
Yes, part of what you're paying for is labor, but I guarantee that if the laborers actually got paid what you're getting charged, the world would be a very different place. The main difference between labor and any other good or service is that it does not exchange at its value, it necessarily has to exchange below its value, or else nobody would see profit (that value that people make that companies keep). This is necessary in a capitalist economy or it falls apart. This is why its hard for me to want to include it in our discussion about wages and inflation, because it is valued very differently from anything else, and again, is not something most everyday people are concerned about, which I've been very consistent about arguing about. I have not once talked about how inflation has affected corporations or businesses because I honestly don't care, so I don't see how a discussion about cost of labor is anywhere near relevant (if you say its "part of inflation" again I'm done with this).
> There are many people who might blame inflation in the 2020s on quantitative easing, which is a monetary policy.
https://libertystreeteconomics.newyorkfed.org/2022/08/how-mu... Already included a link where I gave evidence against that fact, and have not once myself said it was. Not sure where you're getting this argument from, but its not mine and I've never claimed it.
> It's interesting that you're going with a "classical" definition of labor, but not one for inflation, which would classically be defined as purely a monetary phenomenon independent of price changes due to supply and demand.
If thats the definition you want to use, then why do you keep going on about labor cost. If you want to use the monetary phenomenon definition, then inflation is just about monetary supply being higher than it was previously, which is what I said. While we did "see" an increase of money supply at the beginning of 2020, it was not to the degree that people try to argue (mostly M1 catching up with M3), and the monetary velocity was horrendously low (e.g. coin shortage). A low monetary velocity is essentially a lower money supply, which when rebounding resembles inflation (the link I've now included twice from the NY fed).
I agree that we're largely talking past each other. I've been trying to keep the discussion on real wage increases and the fact that although it has happened for the bottom 50% in the last 2 years, it hasn't helped much with their situation, and no redefinition of inflation is going to change that, so I'm still not sure why you're so stuck on it.
Pension funds, which ensure a decent retirement for a large portion of US residents. Index funds, in which many people have invested their retirement funds.
Everyone that is disadvantaged by not holding any of the power is expendable. And expend those in power will do in order to do the bidding of their investors and keep their compensation + bonuses well padded out.
You never see CEO’s take pay cuts, lose compensation, or executive teams get, “right sized.”
It’s always the workers who get the shaft first.
Given that a lot of this is driven by a hedge fund, isn’t this how IBM was gutted back in the day?
It's necessary to divide the companies making layoffs into "profitable" and "unprofitable". It is much easier to make the case for layoffs at an unprofitable company: eventually it will either have to appeal to investors or run out of money, at which point everyone will be laid off anyway.
They put $470 billion through the till and ended up with $33 billion net income, for a margin of 7%. That's a normal profitable company, albeit a huge one that continues to eat the remaining retail world. You can look at the quarterly results too, but there's nothing in the rear view mirror that justifies layoffs.
Is their job to increase it in the short or the long term? These “I know we’ve been doing great for 3 years, but the past 3 months haven’t been so hot, so we’re going to cut jobs.” Messages seem incredibly shortsighted.
Public companies have an incentive to focus on the short term (quarterly reports). This really makes a difference in management behavior. Bill Clinton and Warren Buffett have both talked about this, and presented regulatory approaches to fixing it, but here we are.
If you go on an investor call as the CEO and said, "hey we didn't make any profits this quarter because we invested it all into projects that will grow our revenue X% in the next quarter or half" you'll get fired by the board very quickly, or an activist fund will buy up shares and vote you out as quickly as they can.
Do investors sell if they company income falls for a quarter? I'm guessing yes, and that answers the question of whether the company looks to the short term when seeking only to satisfy investors.
That doesn't explain it. It might be a factor, but it's not a big factor. FAANG jobs pay extremely well and then there's the stock on top.
Is the vast majority working at these companies (with years of vesting, no?) so shortsighted? Especially the higher ups?
Is it a requirement at these companies that you have to be 10000% in debt and living paycheck-to-paycheck to be a SVP/VP/director/whatever so you have to be hyper-focused on that stock comp?
It's just ridiculous. (And note, I'm not saying it's not a factor, it might be, but it's just not the full picture.)
> FAANG jobs pay extremely well and then there's the stock on top.
When excluding RSUs, FAANG jobs are not extreme in any way. RSUs are not a cherry on top but an important component of remuneration. Often for mid-level and above (roughly TL/staff engineer and Manager-II), the value of RSUs is more than 50% of total compensation.
tech/IT salaries are very high compared the median income of the country/region. and FAANG base salaries are top of that, so ... I would say they are infact extreme.
It's taken on a life of its own at this point. The idea that the quarterly stock price is The One And Only Metric That Matters arose for various reasons related to what was mentioned, but over the years it's become so ingrained in the minds of executives and other wealthy people that even when those conditions don't specifically apply, they still act as though they do.
Always forgotten: for every seller there must be a buyer.
Generally speaking, unless there is a fundamental change in outlook, selling based upon the latest earnings report is the hot money which attempts to chase the latest greatest and is moving on (and rarely tells you about their misses).
investors care about long term profits. If they magically knew that income would fall this quarter and 2X next quarter, the price would go up.
The challenge is that they dont have magic powers to see into the future. If a company income is falls this quarter without a compelling reason such as investment, this data indicates that the company will not do good next quarter.
The are tons of examples of company stock prices increasing due to a acquisition, despite a lower quarterly profit.
This might be true of a lot of companies, but then you look at others like Waymo where the revenue is pure projection, the relationship between staff numbers and having a workable product unknown and the pile of cash available to fund it not requiring any borrowing, and it looks suspiciously like trend following (with maybe a bit of actually self driving cars are further off than we thought but, hey, not our mistake because everyone else is doing layoffs too thrown in)...
It’s not trend following, it is genuine existential fear, particularly someone like waymo -
With 0% rates money is free and you can take forever to make a profit, nobody cares, just borrow more money if you run out.
With 5% rates money is expensive and you have say 2 years to make a profit or everyone loses their job and investors lose their funds.
This doesn’t really apply to massive companies like google or MS of course but it does to anyone smaller without a cash cushion (the majority). Now job cuts may or may not be the right decision but they are triggered by very real and urgent fears about plummeting earnings.
I picked Waymo because unlike some startups losing staff obviously isn't the route to profitability for it, and it started off as a Google-branded project backed by the near unlimited cash reserves of Google. If they're in a position where they're not confident of getting further support from that source, I don't think IRR calculations over a 2 year time horizon are the main factor there.
IRR calculations, profit, value actually matter again because the risk free rate has dramatically gone up and will stay up, after a decade where they didn't matter.
Cheap money has distorted the entire market and conditioned a generation of investors to expect unreasonable returns and to ignore the price, revenue, profit and loss.
A lot of middle and upper management pays lip service to increasing value for the investors, but they don't really care for the investors any more than they care for their employees or their customers. It's better for them to be paid in cash and be ready to jump ship at the first sign of trouble than the much riskier course of counting on long term growth of their present company.
To be fair, stock price for large profitable big companies has almost nothing to do with investment money. When someone buys a stock, the company doesn't see any of that money.
The real driver is shareholder returns. The shareholders would rather make more money than provide more jobs / run a charity.
Maybe you were saying the same thing, but the companies don't see the new investor money, other investors /owners do
I agree- someone with money can simply put it in bonds or a savings account. To invest in a company it has to promise to return more than the 5% per annum
Twilio has a neat platform, but their standards are very low or nonexistent when you experience jitter, large audio buffers or routing issues.
Providing PCAPs and reproducing routing issues doesn't result in support addressing these issues. Many other IPES and CLECs will actually fix these issues when documented.
for me I'm surprised that craigslist is just randomly in the middle of the list, a business that makes 1bn in ARR with 50 employees is insane and should be in it's own separate category.
all other companies are listed in 10s of Mil in Annual rev (sometimes one spike) or acquired for billions (which implies rev in 100s of mel).
unfortunately it won't work without the APIs because it needs to be part of our product and there the data is constantly being updated dynamically by different actors / processes .
Hey Matt, I can't develop cool looking apps like this. I'm envious.
What I can tell you is that sales people at big software companies never say 'No it can't do that' as an initial conversation. They would say something like, 'I'm sure it could do that. Let's set up a call to get your requirements straight'. He might only need a subset of your features, and the api needed could be trivial. He might have a $moneyisnoobject Corp waiting to pay.
I mean you are completely within your rights to push away non-core users if you want.... but you know when a saas price page has Free, Basic and Enterprise teirs, and the Enterprise one has 'please call' next to it? That is because the price for customization is too embarrassing for both parties to make public!
your emotional labor as a founder is clearly a huge one, you should be aware of it, but the article is foundementally ignoring that fact that there is a price for everything.
we all so the "pasty" elon musk ... it's not that it's the only way to build amazing things and so many people look that way playing video games ....
my point is, anyone wants to build something and not pay for it (emotionally, financially, reputation ....) is just unaware what the word build means.