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HTML Fed's Cook says AI triggering big changes, sees possible unemployment rise
tmaly wrote 51 min ago:
Cook says we are cooked should have been the title
drivebyhooting wrote 1 hour 13 min ago:
If productive output really stays the same while employment (and tax
revenue) drops, there are only two ways for the government to stay
solvent:
1. Print money
2. Increase taxation
Thatâs it. An eroding tax base necessitates one of those or a
combination.
lazide wrote 1 hour 10 min ago:
sure, but also looking at the pattern of who is involved - they could
also declare bankruptcy (even if federal govât bankruptcy isnât
actually a thing).
le-mark wrote 1 hour 20 min ago:
Iâve been a nay sayer up till two weeks ago when I actually sat down
and coded a non trivial feature with AI and I was blown away. The
problem was one that there may have been at most 5 open source versions
that they had been trained on.
Today I am planning an exit strategy. Anyone else considering what
theyâll do in a post AI software engineering world?
gedy wrote 53 min ago:
Writing the code has never been what has held companies back.
A lot of companies will use the speed of AI to wallpaper over the
fact that they don't know what to make or how to prioritize.
df2dd wrote 26 min ago:
When I read comments here, Im beginning to realise many people get
lost in the noise and cant seem to figure out what exactly is the
true bottle-neck of producing great software that people (be it
consumers or folks employed at firms) purchase/use.
Writing code faster alone doesn't change a great deal. Frankly
it'll just create a larger influx of noise. Focus is very difficult
to do, it'll become harder in the advent of LLMs.
le-mark wrote 6 min ago:
LLM change the dynamic so an individual or small team can
replicate the work large companies. Especially if they worked on
that large application before.
df2dd wrote 5 min ago:
.... another simpleton take.
Ive heard enough of these boring one-two liners.
jryan49 wrote 55 min ago:
Save up enough money to be safe for many years after I get laid off
so I have plenty of time to figure out what to do.
drivebyhooting wrote 1 hour 6 min ago:
I have no workable exit strategy because I have small children and
our family has been continuously under layoffs and terminations.
If the doom really comes to pass then what future is there for us? I
fear a life of impecunious servitude and poverty more than death.
jvanderbot wrote 57 min ago:
Regardless of the future you have to plan for the worst and hope
for the best.
I don't have time to post significantly about it but I'd love to
trade thoughts and figure this out.
Email?
blindhippo wrote 1 hour 8 min ago:
I've been using these tools for nearly a year and half on a daily
basis. They've become an integral part of my tool box for solving
problems.
But writing code was never much more than 35-40% of my job while
working for companies/others. Most my time has always gone towards
communication, design, and validation. All three of those are not
particularly vulnerable to mass AI automation except for the most
trivial of scenarios and I have not seen evidence that has changed in
over 2 years of so called "improvements".
My "exit plan" ultimately is to be one of the engineers capable of
using these tools to scale my impact accordingly so I can focus on
higher order problem solving, which ultimately is what is most
valuable. I would be more concerned if I was in marketing/sales or
frankly middle management.
Maybe this is just "copium" on my part, who knows, this sector is
moving fast.
mekael wrote 48 min ago:
I was discussing this with one of my counterparts today, and we
both agreed that writing the code is the easy part, and actually
knowing what to do / getting requirements sorted out / working with
our compliance team are the hard parts. That being said, I'm in a
pretty highly regulated industry so it just might be that.
df2dd wrote 24 min ago:
Envisioning what should exist is always the hardest part.
If LLMs provide substantial material to be able to produce what
one envisions faster, that is great. But LLMs will not be doing
the envisioning. Most humans already are poor at that. Hence why
there are very few real 'visionaries' in history.
Envisioning always requires deep thinking. If LLMs eat away at a
humans ability to sit and think, this will make envisioning
solutions harder. So you'll see more stuff produced, but largely
more crap.
lifeisstillgood wrote 1 hour 13 min ago:
We used to call the job Analyst Programmer. I am not sure what thing
your code did but I am pretty sure you needed it - but who could
understand that gap existed ? Who could explain to an AI that it
needed to create this obscure code to solve that problem. And now
comes the hard part - persuading your organisation to adopt it.
AI can code - but can it understand what it missing from the
organisation and persuade it to chnage - to spend years at industry
conferences?
Look at Starliner.
NASA just announced that Boeing stuffed up, not with an engineering
mistake (no one still knows exactly what broke) but that the whole
organisation is so screwed up and so political Nasa just donât
believe Boeing can fix it.
AI cannot fix our turf wars. Thatâs not intelligence (humans know
going to war is bad, but Putin still exists). I ye the systems we
live in, and work in.
Changing those is feasible - once they are coded, transparent and
open To inspection in a democracy.
We need programmable introspective systems of organisation -
democracies in other words.
The engineering was not the problem - the problem was the
organisation was more or less toxic and incapable of doing
engineering. Writing code that wonât get used because if politics
is a job we and AI can both do.
almostdeadguy wrote 1 hour 15 min ago:
How do you plan an exit strategy for something that may or may not
obsolete a whole field in a matter of months? Not sure there's a real
way to do such a thing.
aabhay wrote 1 hour 16 min ago:
I would emphasize self reliance and sustainable living. Things like
home ownership, dollar-resistant assets like gold, and self education
in topics that matter to you and your existence.
Another way to frame it is what would you do in a low trust
environment where corporations and the government were not to be
trusted. You would likely avoid things like bubble bursting AI stock
investments, jostling for rank in a company, etc.
le-mark wrote 1 hour 11 min ago:
If post AI software engineering is a thing then this is NOT a
bubble.
uejfiweun wrote 1 hour 16 min ago:
Yeah, it's pretty wild, huh? I'm at one of the big tech companies and
the strategy that I've fallen into is to basically just mostly coast,
save / invest as much as possible, and hope that this gets me to a
financial threshold of "permanently comfortable" before the job
losses kick in.
As for what happens after that, I'd really prefer not to have to do
physical labor or trades. And it doesn't seem like any other white
collar occupation is really going to be insulated, other than perhaps
medical. So my strategy is to basically wait and see what society
looks like after the transition and I guess I'll try and decide on
something then?
etc-hosts wrote 1 hour 24 min ago:
Which means we'll all work on expanding the welfare state? Which
exists to take care of the unemployed portions of our population.
Right?
rchaud wrote 45 min ago:
Expanded military recruitment will be the new welfare state.
hunterpayne wrote 1 hour 40 min ago:
Just yesterday, Goldman and MS said the exact opposite.
HTML [1]: https://www.washingtonpost.com/technology/2026/02/23/ai-econom...
keeda wrote 1 hour 9 min ago:
Two different things. My understanding is that the Goldman Sachs take
was about the effect of AI investments (largely the humongous CapEx
spends by the hyperscalers) showing up in the GDP.
This is about labor productivity, a standard national-level economic
indicator (see [1] and [2] ) going up 4.9%, as reported in this
article linked in TFA:
HTML [1]: https://www.bls.gov/news.release/pdf/prod2.pdf
HTML [2]: https://fred.stlouisfed.org/series/OPHNFB
HTML [3]: https://www.reuters.com/world/us/us-third-quarter-productivi...
gaogao wrote 1 hour 10 min ago:
Nah, the articles are non-contradicting. That article focuses on how
the spend mostly goes to imports, which decreases GDP. This one
focuses on the effects on unemployment. It's very plausible that a
decrease in interest rates right now would lead to more imports and
AI spending, not increased employment.
root_axis wrote 1 hour 45 min ago:
I think it's always important to consider incentives when thinking
about what institutional leaders are saying.
> In a productivity boom such as this, a rise in unemployment may not
indicate increased slack. As such, our normal demand-side monetary
policy may not be able to ameliorate an AI-caused unemployment spell
without also increasing inflationary pressure
I'm not saying AI isn't impacting the employment market, but this
statement isn't really about AI so much as it is an advance warning
that inflationary monetary policy is unavoidable if all the people
saying that software engineering is dead are correct.
twoodfin wrote 1 hour 21 min ago:
Monetary policy isnât inflationary if itâs on par with real
production gains. More money chasing even more more goods is
deflationary.
measurablefunc wrote 1 hour 20 min ago:
What goods?
AnimalMuppet wrote 1 hour 10 min ago:
Software is a "good", as far as economic statistics go.
AI is helping produce more software, right? Including more
software that is for sale?[1] Or more online services that are
for sale?
[1] One of the interesting things here is going to be liability.
You can vibecode an app. You can throw together a corporation to
sell it. But if it malfunctions and causes damage, your
thrown-together corporation won't have the resources to pay for
it. Yeah, you can just have the company declare bankruptcy and
walk away, leaving the user high and dry.
After that happens a few times, the commercial market for
vibecoded apps may get kind of thin. In fact, the market for
software sold by any kind of startup may also get thin.
rchaud wrote 53 min ago:
Software stopped being a good when it no longer came in a box
with finite inventory, that you had to pay for only once. It's
part of the services economy, same as insurance or car rental
services, regardless of how the Fed classifies it.
measurablefunc wrote 1 hour 2 min ago:
So is the premise here that making more software is going to
have a deflationary effect on the entire economy of material
goods? If so then that's obviously nonsensical.
AnimalMuppet wrote 44 min ago:
That's not what I said, no. More software is going to have a
deflationary effect on software, which is part of the "goods"
economy if it's sold in a box, or even (I think) if it's sold
as a download. If it's just online, it's probably considered
a service. Either way, more of it, more cheaply produced,
decreases the value of each piece.
measurablefunc wrote 39 min ago:
I haven't paid for any software in a long time & my monthly
subscriptions for data storage & basic AI adds up to less
than $100/month. Data storage is already as cheap as it
could possibly get so AI is not going to make that any
cheaper. More money in the economy is not going to have
deflationary effect, prices for everything will go up,
including software services like data backups b/c the cost
of the service has nothing to do w/ the software & the
hardware is only going to get more expensive.
selridge wrote 1 hour 43 min ago:
Or that the fed is preparing us to expect higher levels of
unemployment for the same level of inflation.
root_axis wrote 1 hour 41 min ago:
Perhaps, but her phrasing seems to imply they will act to reduce
unemployment, and we can also assume Trump will mandate that they
do so once he takes control of the fed.
selridge wrote 49 min ago:
We'll see seigniorage. That's about all we can predict from that
particular breakdown of civil society.
almostdeadguy wrote 1 hour 8 min ago:
As any president should in that scenario? I'm sorry, we're going
to nuke professional class workers and let tech executives keep
their 2026 money from the proceeds and let the losers go jobless?
Not likely if you don't want a bloodbath. Let me be clear: fuck
Trump, but any president who doesn't do that is out of their
mind.
dghlsakjg wrote 33 min ago:
The fed was very intentionally set up to be resistant to
tampering from political forces, and especially the executive.
The entire governance structure is so that they can take
actions that may be painful in the short term without being
stopped by politicians.
Before Trump it was, for good reason, incredibly taboo to place
pressure on the fed or even hint at interfering. Most
economists are pretty horrified that particular barrier has
been crossed.
The fed has a pretty big stick, and a mandate to try to balance
inflation with unemployment. Throwing politics into the mix is
a very bad idea since politicians worry about very different
things, and adhere to election timelines.
The president has no business getting involved here.
recursivedoubts wrote 26 min ago:
the fed was set up to protect the big banks
the rest, and in particular the economics profession, is
window dressing
selridge wrote 8 min ago:
any other pearls of wisdom from the Mises institute you
want to share?
selridge wrote 46 min ago:
It is not at all clear that monetary policy can actually work
here, which is what the statement is saying. When your demand
side policy doesn't work, it's just pushing rope. It doesn't
matter if or how bad you want a certain outcome.
eighty8days wrote 1 hour 47 min ago:
Is it AI that's causing problems or is the US govt finally
acknowledging how high the bar is in general for getting employment?
It's not just AI that has influenced that.
More importantly, are they planning to do anything about it?
Avicebron wrote 1 hour 55 min ago:
> While AI will offer "new opportunities,"
It would be helpful if this was articulated in depth. It's used as a
shibboleth alongside "productivity" but it's rarely followed with the
concrete details
TeMPOraL wrote 59 min ago:
Important thing to remember is that "new opportunities", whatever
they are, are neither for you nor your children to partake - they're
for the people just entering the workforce. Those whose careers
suddenly disappear, as well as their families and children, are too
busy dealing with consequences of being suddenly thrown down a rung
or three on the socioeconomic ladder.
mindwok wrote 1 hour 2 min ago:
Itâs not articulated in depth because nobody knows what
opportunities there are on the other side.
tbrownaw wrote 1 hour 14 min ago:
Prediction is hard, especially of the future.
This isn't the first time they new technology has reshaped society,
or even just the economy. How well were the results of prior things
predicted ahead of time?
parpfish wrote 1 hour 41 min ago:
âThanks to AI (and new immigration policies), there are tons of
exciting new opportunities for Americans that want to pursue careers
in: harvesting crops, installing roofs, or home health careâ
paxys wrote 2 hours 4 min ago:
I'm not saying it is totally untrue, but this is the same generic,
hedged statement that every business and political leader has been
repeating for a couple years now. Unless there's anything new or
noteworthy added (and looking at the article there isn't) what is
really worth discussing?
selridge wrote 42 min ago:
This is an ignorant statement cloaked as cynicism. Its purpose is to
give permission to check out on politics.
janalsncm wrote 1 hour 44 min ago:
They linked to the economic report article: [1] Productivity up 5%.
Productivity/dollar up 3% Q2 and 2% Q3 even as labor costs up 1%.
HTML [1]: https://www.reuters.com/world/us/us-third-quarter-productivi...
emp17344 wrote 8 min ago:
This is not due to AI. The industries with the most impact on labor
productivity are retail, wholesale trade, and manufacturing, all of
which arenât really benefiting much from AI.
The tech sector employs about 2% of the labor force. Even if AI was
dramatically increasing labor productivity in the tech industry, it
would have a negligible effect on these statistics.
keeda wrote 1 hour 21 min ago:
Another source that has been finding labor productivity increases
in national-level data, since 2024 now: [1] > ... on average,
industries with 1 percentage point higher time savings experienced
2.7 percentage points higher productivity growth relative to their
prepandemic trend. We stress that this correlation cannot be
interpreted as causal, and that labor productivity is determined by
many factors. However, the current results are suggestive that
generative AI may already be noticeably affecting industry-level
productivity.
HTML [1]: https://www.stlouisfed.org/on-the-economy/2025/nov/state-g...
hackyhacky wrote 2 hours 0 min ago:
What's new is who is saying it, i.e. people with better understanding
of the economy than you or I.
paxys wrote 1 hour 53 min ago:
People in much more important and powerful positions than her
(presidents, CEOs of multi-trillion dollars companies, top
economists, heck Jerome Powell himself) have been saying this exact
thing in countless interviews and business forums. She is hardly
the first.
hackyhacky wrote 1 hour 24 min ago:
> people with better understanding of the economy
> People in much more important and powerful positions than her
I said "understanding," you said "power." There's a difference:
presidents and CEOs say lots of dumb stuff.
lelandbatey wrote 2 hours 10 min ago:
> "Monetary policymakers would face tradeoffs between unemployment and
inflation. ... Education, workforce, and other policy that is
non-monetary may be better suited to address these challenges in a more
targeted way."
How comforting. Sounds to me like "ZIRP won't fix this one folks, it's
gonna take something other than money to fix what's coming."
lysace wrote 2 hours 3 min ago:
The only question is how ugly it's going to get. Globally.
The closest thing we've seen in terms of scope/velocity is probably
the introduction of the web in the late 90s to the broader world.
Very few jobs were killed by that, though, relatively speaking.
janalsncm wrote 1 hour 40 min ago:
The closest thing is probably workers displaced by machines in the
Industrial Revolution. Some people took it into their own hands to
smash machines, and it didnât go well for them.
Today we use Luddite as an epithet, but they were right about the
effect of automation on their jobs.
rchaud wrote 40 min ago:
That would apply to robotics automation in factories and
warehouses would it not? From what I can tell, all the doomerism
has been focused on white collar jobs because they're not
unionized and it's easier to simulate the ability to code and
produce hallucinatory powerpoints than it is to automate a
factory floor and exceed production targets.
bubblewand wrote 1 hour 45 min ago:
The global effect at my company is that we fired a bunch in the US,
hired a bunch in India, and are probably gonna do the same again in
a year or so, if I'm reading the tea leaves right. We're heavily
pushing "AI" but we're not cutting headcount, just shifting them
overseas.
cactusplant7374 wrote 1 hour 45 min ago:
This whole thing stinks.
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