It was the war with Russia that drove the fed to raise interest rates in 2022 - a measure that was intended to curb inflation triggered by spikes in the prices of economic inputs (gas, oil, fertilizer, etc.).
The tech layoffs started later that year.
Widespread job cuts are an intended effect of raising interest rates - more unemployed = less spending = keeps a lid on inflation.
Fully agreed, but I suspect that was written that way because the Fed was rather more worried about the fact Russia was at war and under western sanctions, than that Ukraine was busy defending itself.
Perhaps "Russia's war" would have been a better phrasing that captures both spirits (but it's not a phrase you hear said much).
You think "Russia's war" captures more of the global relevance than "Russia's invasion of Ukraine"?
For example, Ukraine was a very important food supplier -- one of the top grain suppliers in the World -- and the invasion caused shortages of some foods. Another example is that Ukraine provided a good source of iron ore for EU-based manufacture. If nothing else that would be important to USAmericans as indicating a market opportunity.
Without that invasion and Putin's inspiration, would Trump have threatened invasion of USA's neighbours? That's got to be vital to USA finances too.
Yeah, no idea what's going on in this thread. As far as I can tell, this connotation was just invented for the purposes of- well, I shouldn't guess motivations, but I can't think of any good ones.
Here's the BBC using it[1], CNN[2], The AP [3], The Conversation [4]
"It was the war with Russia that drove the fed to raise interest rates in 2022" sounds like the fed or the US was at war with Russia. Your links 1, 3, 4 mention Ukraine in the same sentence as "war with Russia", which makes it clear that the US and the fed are not at war with Russia. Link 2 talks about a threat of war, not an actual war.
GP's complaint is that it implies that someone other than Russia started the war. I don't think mentioning another party who wasn't responsible should change that.
Your demands of an absolute committment to maintaining the domestic establishment's war narrative while making a technical point have been noted. Slava Ukraini.
Who, precisely, do you consider to be the domestic establishment? Neither the President of the United States nor his Secretary of Defense subscribe to this narrative.
It's curious how the "true narrative" people fight with such a passion for so frequently coincides with the dominant war narrative currently pushed by the imperial power center they live under.
That is, until 10 years later when they have a new narrative about a different military rival. They quietly stop pushing the old narrative and everyone quietly admits the old one was kinda bullshit all along.
E.g. my views didnt change one iota since 2003 but these views at some point magically stopped conferring a "Saddam sympathizer" moniker from people who demanded unthinking ideological commitment.
It works the same way with people who live under and unthinkingly consume Russian imperialist propaganda too. The more passionate ones make routine demands for ideological purity similar to the one above.
What annoys me is that war is war. Of course there’s an aggressor and defender that’s how war works. A bunch of people die. War happens because there is no peaceful answer to, “who is right”. There is no global true narrative. Does it really matter which side is justified? No. The side that wins writes history. But that doesn’t stop a bunch of people so far removed from the war it will never affect them even one tiny bit from burning cycles arguing about which narrative is the nice “true” one. Likely so they can feel good and comfy and morally superior when they close their eyes at night.
That is, until 10 years later when they have a new narrative about a different military rival. They quietly stop pushing the old narrative and everyone quietly admits the old one was kinda bullshit all along. /---/ It works the same way with people who live under and unthinkingly consume Russian imperialist propaganda too.
It certainly does. The Russian war against Ukraine began with unmarked soldiers, nicknamed "little green men," and Russia denying any involvement, claiming instead that Ukraine was in the midst of a civil war. When the latest Russian weapons appeared in Ukraine, Russia claimed that tourists must've bought them from military surplus stores.
Then we went through a lot of bullshit - that Ukrainian nationalists were committing genocide in Donbas, or that Ukraine was secretly developing nuclear and biological weapons.
Now, 10 years later, the narrative has shifted to how this has always been a major confrontation with the USA and NATO, a "proxy war". No doubt, it will shift many more times. Looking forward to when the current "supreme commander" Putin will be regarded as a failure, much like Gorbachev, and blamed for causing the difficult 2030s.
It began with a false flag terrorist attack on civilians in Maidan square which was used to usurp a democratically elected president who was extremely popular in the east and south.
Nobody has ever been jailed for this terrorist attack and all the evidence points to Ukrainian fascists being culpable, including:
* The Berkut who were there being tried and the trial falling through because all of them were too obviously very far away from the protestor-controlled hotel where the snipers nest was set up.
* A Ukrainian war hero who had no reason to lie who was there telling people who was responsible (before being thrown in jail).
* A group of the snipers (mercenaries who were there who never got paid) went public.
It was as much a proxy war back then, it was just fought under the surface with NGO agitators instead of weapons deliveries.
Has there ever been a terrorist attack that was not a "false flag" according to internet loonies? :D
The fact that you have to make something like this up within the first ten words of your narrative really shows just how detached from reality it is.
I wonder what narratives will dominate after the war, when reality sets in: hundreds of thousands dead and never returning home; several times as many disabled, many of them severely; the might and pride of the Russian military sunk or blown up; returned soldiers running massive criminal rings like in the 1990s; state budget empty from massive military spending, leaving people to survive on their own as safety nets crumble. Some conspiracy story about snipers 10+ years ago in another country doesn't really cut it, and getting beaten in an imagined confrontation with the "collective West" sounds really pathetic too, especially when the other side didn't even step into the boxing ring. The USAF hasn't flown a single sortie against Russia, yet strategic bombers are already burning on airfields like in the opening hours of Operation Barbarossa.
>Has there ever been a terrorist attack that was not a "false flag" according to internet loonies? :D
Reichstag fire. All the nutter conspiracy theorists think Hitler did it. Obviously you know better.
>The fact that you have to make something like this up
Evidence doesnt mean much to some people. They will follow the narrative of their leaders whether it is dictated via Moscow blabbing about biolabs or Washington that they allied with freedom loving democrats in Ukraine rather than Nazi goons.
Excellent example. In case you're not aware (as the snark suggests), the broad consensus among historians since the 1960s holds that the Reichstag was indeed not set on fire by the Nazis.
2 trillion in unnecessary Covid related spending when Covid impact was winding down was the key reason for inflation. "$2000 checks!" was the campaign slogan
People sometimes conveniently forgets that inflation historically has taken some 12-24 months to trickle through the economic system. That was the case this time, too. And the first inflationary impulses, famous for being "transitory", was actually before the Russian invasion of Eastern Europe.
We're blaming the 1000 dollar stimulus checks to the people and not the massive PPP loans that the government never bothered to collect on? It's amazing how well billionaires trained us to fight amongst one another as they ransack in broad daylight.
The near zero interest rates, pause on student loan payments, pause on rent payments, doubling of unemployment pay, and then the dustings of stimulus checks and bonus childcare checks, all while most white collar workers just continued working like nothing happened, created an incredibly cash rich environment that most people have never seen before.
And the PPP loans handouts to business owners just to throw more gas on the fire.
A lot of things were going on in the early 2020s that at least anecdotally seem to have disproportionately affected software jobs so I’m skeptical it’s purely an interest rate phenomenon. But the consensus does seem to be that software has gone from being a ridiculously easy job market by professional job standards to at least a moderately challenging one.
Software in the US has (aside from maybe finance) been an almost uniquely well-compensated field. That will probably adjust over time especially given the inflow of grads primarily in it for the money.
>A lot of things were going on in the early 2020s that at least anecdotally seem to have disproportionately affected software jobs so I’m skeptical it’s purely an interest rate phenomenon.
Software industry was over hiring probably ever since dot-com bubble because after the bubble burst revenue and profits were rapidly growing and it never really stopped. I would rather blame the managers who constantly pushed for more workers instead of increasing the productivity of the existing workforce.
It's all the same money printing. The issue is that people generally believe that emergency measures were justified in early 2020 when the crisis hit and there were so many unknowns, but not justified a year later when the virus was already endemic and the vaccine was out.
You have it backwards, inflation causes an increase in the money supply. When prices rise, it forces people to take on more debt causing an increase in the money supply. Those 2000 checks actually probably dampened inflation for a short while. Most people used those checks to pay down debt (which destroys money).
That's one of the factors. In Europe at least the other factor is high energy prices after the broken turbine theater and subsequent destruction of Nord Stream.
Prices and unemployment really started to rise after that. The EU buys overpriced LNG from the US, so the US is somewhat isolated from that. But the US is not isolated against the general economic downturn worldwide.
Politicians do not care. Merz, with barely 25% approval of the German population, continues the policies outlined by Hegseth during his visit to the EU. Trump still plays theater to appease his MAGA base, but Senators Rubio and Graham increasingly start holding the reins.
There was a specific and particular expectation (and even patience) for inflation to drop naturally as the supply chains again reached equilibrium after Covid.
Russia's invasion of Ukraine however caused a whole bunch of economic inputs like energy and fertilizer to spike, and central banks world wide didn't want economies to "get used to" constant high inflation rates, causing a perpetual problem.
Work from home was the wrench in the governments plan. If the pandemic happened in 2000, the stimulus would have been needed, as the tools for remote work were way too poor back then.
But instead all the productivity workers just switched to their home office and things just kept working. The stimulus should have been shut off in early-mid 2021 when this was abundantly clear. But the government let it run because people were so jubilant in the money shower.
Biden credited the inflation to Putin, claiming that 70% was due to Putin’s price hikes.
That was not entirely true.
Trump’s pandemic spending (lockdowns, vaccines…), and subsequently Biden’s, but most importantly the curiously named Inflation Reduction Act were obvious drivers. You can’t stimulate an already overheated economy to the tune of 2 trillion without getting Larry Summers a bit worked up.
Raising interest rates has nothing to do with the 2022 war. If it did, rates would have come back down. Interest rate increases don't help with supply/demand driven price spikes. They do help with money supply and aggregate demand driven inflation, which was the cause of our recent inflation (that started way before Russia invaded Ukraine). The war was a convenient excuse because it deflects responsibility.
And remember when they first said inflation was "transitory" and caused by supply chain issues from the economy reopening after covid? They didn't raise interest rates then because, like I mentioned above, interest rates don't help with supply shocks. If they did, the Fed would have raised rates then.
You are wrong, Trump's 2017 Tax cut bill had a provision that kicked in that caused the layoffs. Engineers became more expensive because now companies had to amortize their costs over 5 years instead of immediately.
There is no proof that higher interest rates lead to greater unemployment. In fact, macro employment kind of boomed during the referenced period. I'd posit that higher rates actually boosted macro employment stats . Why ? Because higher rates = higher income to rich people via interest income channel = higher fed budget deficits ( gov is net payer of interest) = higher GDP = lower unemployment ceterus paribus.
This is completely backwards. When interest rates are high, the expected returns of equity investments have to be even higher to justify the risk over risk-free fixed income assets.
And that's only the indirect effect on equity funding; debt funding just directly becomes more expensive.
It was the war with Russia that drove the fed to raise interest rates in 2022 - a measure that was intended to curb inflation triggered by spikes in the prices of economic inputs (gas, oil, fertilizer, etc.).
The tech layoffs started later that year.
Widespread job cuts are an intended effect of raising interest rates - more unemployed = less spending = keeps a lid on inflation.
AI is just cashing in on the trend.