alt Hacker NewsSpeaking from my personal observations...
It is not just tariffs. The cost of living in the US, especially housing, has approximately doubled in my area since 2019. There is a massive overinvestment in real estate. When housing costs go up it forces companies to pay their employees more to adjust which then drives up the COGS. This becomes a feedback loop because the real estate investors see the prices go up and say "well we have to raise rents because COGS are going up."
Competing with any offshore becomes impossible (especially when compared to countries which subsidize their production). Companies close instead of attempting to compete. Why would you when simply investing in real estate, crypto or AI would net more money? The parts needed to produce in the US are typically not made in the US.
Tariffs hurt...a lot...the companies I work with directly (including mine) have been struggling with them for a decade now. But it is a lot more than that...there is a general lack of interest in making things that are real. Plus, the cost if you attempt to do so puts you in a position where you cannot be competitive.
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Something in this is contradictory and just hoping for a clarification - over investment in real estate should drop costs. I assume you mean under investment leading to prices requiring an overly burdensome amount of personal investment in housing?
+1 on the tarrifs and the cost of living. We actually left the USA and moved to the Caribbean because our R&D was being burned up in tarrifs; actually cheaper to move the operation. It’s stupid to raise tarrifs overnight when there are no comparable domestic alternatives. A 5 year, stable plan to ramp tariffs? Sure. That builds a runway for local supply and transition. Random tariff adjustment between 0-200% changing every month? Absolute poison for innovation, and local suppliers can’t ramp on chaos.
The cost of living, also, needs a reframe. The real truth there is that most people, who live paycheck to paycheck, are half as prosperous as they were a couple of years ago. Think about that. The Majority of an entire country became twice as poor practically overnight. It’s not cost of living rising , it’s standard of living being halved for most Americans. It’s not a small thing, and it will have reprocussions for decades. A population on strong retrograde prosperity does not innovate, does not invent, does not plan for the future. It’s basically terminal cancer.
No doubt innovation will rise once the ashes cool, but that’s more like what we are seeing in Eastern Europe, admirable and significant, but no equivalence whatsoever to the economic juggernaut that the USA once was. (And still is, for now)
Maybe automation will turn that around, but who then is the beneficiary of a fleet of millions (billions?) of corporate owned general purpose humanoid robots? That’s a big part of what my startup is working on ; making that phase generally useful to regular people, not just corporate giants.