[s1artibartfast]

I think they're presenting a more accurate description of how the world actually works, which is useful. When people make a claim that X happens because of Y, that is a claim of causality which can be true or false or missing important factors.

[hayst4ck]

Just like in physics where you can choose a point of origin to make calculations easier. Choosing the frame from which to analyze the situation can often determine the conclusion with presuppositions encoded into the language of the frame.

Here is the truth: Wage measures power, not usefulness, not productivity. Productivity puts a cap on wages because you can't pay a person more than they produce, but it does not determine the wage.

So when someone says:

> The company needs to lower costs, and do some layoffs, in order to make it more profitable.

This denies the idea that labor could be powerful enough to hurt the bottom line of the company enough that layoffs are not profitable.

The frame (more profit good) hid that for labor more wage and less layoffs are good. What is best for the company is being confused for what is best for everyone or what is best for labor, and labor cannot get what is best for themselves because they have no power.

You presupposed that what is best for the company is what is best with your choice of frame.

[chii]

> What is best for the company is being confused for what is best for everyone

and there we have it - the difference in point of view. No company (nor anyone really) is making decisions that is "best for everyone", because that would imply altruism. And i am a stern believer that altruism does not exist.

[Retric]

Except he didn’t actually explain why and more specifically when just what.

The question isn’t why the CEO got rewarded for doing X, but what changed to allow him to make this now vs those same cuts happening 10 years ago. It’s not like Google was in an unprofitable downward spiral and needed cuts to turn things around the only change is how wildly profitable they are.

[s1artibartfast]

lots changed, but mainly the economic environment. Google is still wildly profitable of course.

The relevant question is could those workers generate more than %5 returns on that $70B google is using for stock buybacks. The company leadership and investors seem to think the answer is NO.

Therefore you fire the workers, Give cash to investors, and the investors park it with the fed getting >5% interest, with zero risk, and no need to worry about workers, products, or customers.

This is the entire point of the FED rate raises. Hoover up all of the money floating around being invested in company growth and new product development.

Once you get enough layoffs and paycuts, eventually inflation will go down because people cant buy shit.

Thats the "long answer why".

[hayst4ck]

> Once you get enough layoffs and paycuts, eventually inflation will go down because people cant buy shit.

If people can't buy stuff why wouldn't you expect marginal cost to go up?

More people buying more stuff means economies of scale. Less people buying less stuff means the loss of economies of scale.

If people are less able to buy stuff, I don't see any reason to believe that prices would go down. If anything it seems like it creates an incredibly negative feedback loop.

A company might firesale their inventory resulting a temporary reduction of inflation, but it seems like production would decrease because demand decreased, which would result in more layoffs and stagnation.

I am not an economist, so I guess I am curious why stagflation is not the expected result.

[chii]

> I don't see any reason to believe that prices would go down.

and they won't. Lowering inflation is not the same as ensuring prices drop (it might happen, but it would be an unintended effect of the Fed's policies).

prices will remain high (compared to pre-covid) but be stable after inflation drops down. And i would imagine that the Fed's policies would change if they start seeing deflation (which is when prices drop).