alt Hacker NewsDo not mistake a resilient global economy for populist success
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I find the S&P500 to be interesting as a demonstration for currency risk. Denoted in US, it went up ~18% or so. For me as an EUR investor, it went up just 4.6% when accounting for the loss of the USD. Comparing that to indicies that usually do not perform that well, Euro Stoxx 50 is up ~22% and MSCI Emerging Markets ~21%.
Do not mistake economic indicators such as GDP or "growth" for meaningful measures of economic health.
Protectionism is failing to revive manufacturing
Yes.
The rare earths situation is embarrassing. This has been a political football for years now, but the efforts to fix it aren't working very well.
First, you need a mine site and a mine. The US has a big one at Mountain Pass, California, and it's producing. But in the past twenty years, it's gone bankrupt twice and has been through three owners, because there were a few rare earth gluts and the price crashed. Also, they once had a big spill from a retention pond, and that was expensive.
Mountain Pass isn't the only ore deposit in the US. There's what's supposed to be a good one in Montana. But the company developing it has been doing "studies" since at least 2023.[2] There are a few other rare earth "mining" companies which don't produce anything yet. There's one in Tennessee with a "definitive feasibility study" underway. I'm tempted to say that the real product is the stock. Anyway, it's not like there's a need to go to Ukraine or Greenland for rare earths. It's all available in the US, with a decent climate, good road access, and no wars.
Second, you need a beneficiation plant at the mine. This takes in rock and dirt, pulls out ore with a reasonable fraction of rare earths, and outputs almost as much waste as it takes in ore. This is a somewhat messy process. In China, the settling ponds are visible from space. Mountain Pass has a better process (the Sierra Club approves) and doesn't make such a mess. The waste is dried, the fluids are reused, and the dry waste can be put back where it came from eventually. This is now a known technology and is being replicated at some Australian mines.
Then you need a separating plant, where the actual rare earths are separated out. The US has very little capability in this area. Not for any good reason. There's a small startup.[1] They're slowly scaling up. Production in 2027. There's another startup, Medallion (then Gabo, then Gamma) which has been fooling around since 2020 without building much. That's one of those companies where you read five years of press releases and they're all about financing, reorgs, and management changes, with no actual product. Here's another one, RER. They've been at this since 2021, and they have a little demo plant in Wyoming.[3]
Then you need a smelting and magnet making plant. This is a modest size operation, because it processes tons, not millions of tons, of material. One has been built in an industrial park in Texas. That took funding from DoD and General Motors. Not big enough to replace all imported magnets.
This is US postmodern capitalism. The US financial system just doesn't seem to be able to bring a complicated heavy industrial project to completion in a reasonable period of time.
[1] https://rareearthexchanges.com/news/ucore-secures-18-4m-dod-...
I feel uncomfortable the more we celebrate economic 'resilience' Recession avoided. Growth sticks. ~
Jobs remain. I've learned to differentiate survival from renewal.
Surviving is the ability to withstand shocks and not break. Renewing is the ability to rebuild and strengthen so that the next shock is less painful.
Most policies focus on the former. The latter is far more difficult. It is slower and easier to postpone. Protectionism is a classic example. It keeps the numbers stable in the short run but it means there is often less incentive to improve productivity, skills and supply chains. On the surface it all looks fine, but nothing gets better.
A new guide for me is if a policy makes it easier to be static, it is probably not progress. I wonder if others think the same. What signs indicate that renewal is underway? When has buying time worked? What is more important than growth?
The chart they put doesn't prove a point since the difference between today and the last elections in the US can't be appreciated (aside from the fact that in the entire period the drop is caused by automation too). Additionally you have to account for the time it takes to move production from a country to another.
This is not to say that just setting random tariffs to punish other countries is an effective strategy, but I do think that targeted limitation of imports are necessary in a society that is becoming extremely materialistic. My bet is that France's surcharge on Shein products will be the first of many
Well in the U.S., a majority of households are invested in the stock market via 401(k)’s. When their investments do well, the average Joe will give the incumbent president the credit.
The actual average tariff rate has been lower than than advertised rate https://www.nytimes.com/2026/01/03/business/economy/trump-ta...
What stands out to me is the disconnect between macro resilience and the stated goals of populist industrial policy. Growth holding up doesn't mean tariffs or subsidies are working, it mostly means firms are very good at routing around damage
> And it is America’s private sector, not industrial planners in Washington, which is chiefly responsible for the ai boom. The ongoing success of free markets is obscuring the damage protectionism is doing.
The AI boom is also largely being funded by defense spending on both sides of the Pacific. Without state investment this technological boom would also suffer.
Is ancap economists from Austrian school considers economics correctly? They say a lot of things but I still can not decide whether they geniuses or populists?
Do not mistake a year on year profit for a resilient global economy.
When the conclusions don't match your predictions, examine your priors.
Do not "do not mistake..." ...
There's a quote by Mahatma Gandhi that resonates whenever I see contrasting debates about this economic indicator or that:
"I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away."
India's IT outsourcing-led GDP growth can benefit many almost-poor and poor people by giving them access to more spending by the "middle-class" (a very debatable minority in India) and the rich. But it will not benefit the poorest - social welfare schemes do that, but anti-homeless measures cancel it out. Access to formalised lending can do that, but anti-immigrant schemes and the Kafkaesque labyrinth of getting an id-card in India will negate that. And banks won't give you a loan if you're poor (so they go to loansharks).
You can have all the Apples and the Facebooks of the world in California, but putting spikes in places where homeless people could sleep makes Gandhi's talisman stand out far better than any macro-economic indicator.
Inflation can be positive or negative but if you're living in a place with less supply than demand, your rent will go up by far more than the price of eggs. This will hurt you completely independently of the price of eggs.
All this to say - if you care about the poorest, you'll find little to cheer about. But should you care about the poorest? Is that a good measure of healthy economic growth? Is economic growth the only priority after 1991?
You can be poor and destitute in a capitalist dystopia and you can be poor and destitute in a communist dystopia. This is why I hate the language of the Cold War so much - we lose an infinite amount of nuance with terms like "Capitalism" "socialism" "communism" and "GDP"
This is an unusually perceptive lede.
I hate Trump, but this piece doesn't seem to prove or argue anything at all. It's basically free market fanaticism, it says that economic metrics are good in spite of protectionism and not because of it because how could it be otherwise? Invisible hand, etc. It's totally begging the question.
If the free market economy is so resilient to threats, why didn't it thrive also in 2008?
Populism is best understood as the general public asserting elites have “broken the deal” that legitimizes their rule — and the public withdrawing their assent from the regime.
They are correct that the technocratic managerialists on the past century have failed — and failed in a way damaging to the state/nation. (For US and EU at least.) In so far as we’re all discussing that (and have been for several years), they’ve been wildly successful.
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I wish I had the kind of hubris to make a bunch of predictions that all turned out not to happen (high inflation, recession, etc) then come back a year later with more predictions and a “trust me bro, I’m 100% sure this time”
"Do not mistake global economic resilience for a triumph by the likes of Mr Trump. "
Trans: The facts do not match the Economist's predictions, and therefore the facts are wrong.
<< Do not mistake global economic resilience for a triumph by the likes of Mr Trump.
You know.. it is a little hard to take legacy media seriously if the reporting they do amounts to:
'economy is working, but it is not thanks to ANYTHING Trump does'
Give him some credit; try to make it believable.
layoffs.fyi - 2025 was the best year since 2022. I'm fairly certain democrats want me destitute.
https://archive.is/POmBn