[goles]

Can't remember where I read this but essentially most Americans are single issue voters on the economy. They just pick their second most important issue when the economy is humming along nicely.

The economy has been fine for many peoples working lives during ZIRP. But when people feel like their struggling to afford diapers and cereal most other issues become secondary.

[tw04]

Then all those people are in for a heck of a rude awakening. I can tell you what’s going to happen to the cost of everyday goods with a 100% tariff placed on top, and the answer isn’t: they’re going down.

[nprateem]

Populism only works because the average voter doesn't understand economics or politics. Or much of anything they're voting for really.

[kyleee]

What “everyday goods” are getting a 100% tariff? Is there a list somewhere?

[frmersdog]

And the Harris campaign's answer to this was...?

Keep in mind that this is after the Biden admin/Congress gutted half of his proposed infrastructure reform. That half was already compromised compared to what progressives wanted, and they STILL couldn't pass it. Guess who stayed home yesterday?

When you say, "Your only choice to save democracy is to vote for me," reasonable and rational people conclude that democracy is already done for and simply don't vote for anyone. And there were warnings that this would happen - like the primaries in Michigan - but establishment Democrats didn't listen (or didn't care). So, now, here we are. How's that for a rude awakening?

[saynay]

This has been my thought as well. Inflation was high, so low-propensity voters against the current party show up while those for the current party don't. It will take some time to see what the actual voting shifts were, but the economy has always been an accurate predictor.

[lokar]

The general consensus was to avoid high unemployment as that would anger voters.

Now we know high inflation is much much worse in the minds of voters.

[saynay]

Probably true, honestly. High inflation impacts everyone, where high unemployment probably affects fewer people directly.

[margorczynski]

The money from ZIRP mostly goes to the upper class as it props up asset values - stocks, land & housing, luxury goods, etc.

In general easy lending benefits the richest the most - that's why you saw such a growing split between the wealth of the richest and poorest after throwing away the gold standard.

[frmersdog]

>The money from ZIRP mostly goes to the upper class as it props up asset values - stocks, land & housing, luxury goods, etc.

One that people tend to miss: compensation for high-income professionals. When that gets bid up, so does the price of everything they spend money on. Education/childcare, personal electronics, healthcare, transportation, food, etc. It's not just the wealthy and ultra-wealthy; when the upper middle class can pay and not feel pain, that's taken as a signal to jack up prices across the board.

[margorczynski]

I would most certainly categorize what is commonly known as the "upper middle class" as wealthy. Upper-middle usually has a sizable wealth, mainly in real estate, equities, etc. So it is not only the rich and ultra-rich (but of course them benefit from this the most if they don't do anything too stupid). Of course all of these terms and definitions are quite fuzzy so the whole argument hinges on some implicit agreement as to the specifics.

[frmersdog]

No argument from me. I make the distinction because I assume that I'm speaking to them when I'm posting on Hacker News. They generally don't see themselves as wealthy, even though they are.

[qeternity]

ZIRP was the cause of that pain.

[throwaway2037]

    > essentially most Americans are single issue voters on the economy.

Isn't this true in all democracies? It is very hard to stay in power if the economy isn't doing well.

[Pedro_Ribeiro]

In Portugal the same two parties have been consistentently fucking up the economy for the past 30 years with no end in sight. It's comically bad.

They then announce pensions for majority groups like the elderly and get voted into power by the same groups they are financing.

[throwaway2037]

Woah, I had to look up the historical economic performance of Portugal. I found GDP growth figures from 1996. Man, it is rough: About 1.5% per year. Ref: https://tradingeconomics.com/portugal/gdp-growth-annual

That is so low for an upper-middle/lower-upper income country. (Most economists would not describe Portugal as high income in 1996.) I expected EU integration would have made their economy boom. You are right: I have not seen this pattern before. Normally, good democracies can "right the ship".

Why does this persist in Portugal?

[Pedro_Ribeiro]

Hey, sorry I didn't see this comment earlier.

I think there are a few historical reasons:

- We are only 50 years out of a dictatorship

- We were late to industrialism

- Our main business sectors are bad (tourism, agriculture, textiles)

And a few law/cultural reasons:

- Lots of buroucracy and inefficiency + high taxes means making a business here is impossible (I've sold a company that I incorporated here so I'd know ahah)

- Bad education and lack of incentives for companies to be here means younger talent leaves for greener pastures across EU and the US. We call it "brain drain".

- Because all the young talented people keep leaving, the only remaining people are low-income workers or old people (we're a very old country). Old people keep voting the same corrupt parties into power so nothing ever changes.

- There's a big "crab mentality" about people who are wealthy being evil.

Extra:

The party that played the biggest role in getting rid of our dictatorship was the communist party (that's literally their name, Partido Comunista Português), so in Portugal communism is good, and capitalism is bad.

There's lots of talk about taxing the rich here, but the truth is that there are no rich. We only have ONE billionare. If were to tax 100% of our rich we wouldn't be able to run the government for more than a couple of weeks.

[bryanlarsen]

Democratic messaging really failed. The economy was a winnable issue for them. Trump's promises (20% broad tariff, mass deportation, make the Fed a political office, trade wars) would devastate the economy and cause significant inflation. Even Elon Musk admits that Trump's plans will tank the economy. https://x.com/whstancil/status/1851265385909092565

Now right wing commentators are saying that Trump won't actually do what he promised.

https://marginalrevolution.com/marginalrevolution/2024/11/wh...

[toyg]

> right wing commentators are saying that Trump won't actually do what he promised

I expect a lot of voters actually thought that would be the case: "yeah yeah he has to make noise during the campaign, once he gets in he'll just give us some more tax breaks, he's not crazy."

I guess we'll see if that's the case.

[nirav72]

Most of the stuff he promised he won't do. Simply because of the sheer complexity and resources involved. It's not in his nature to focus and work out complex issues. Imagine the logistics required to simply apprehend, process and deport 10-15 million people at scale. He'll probably do better at closing the border than any past president. That's for certain. But actually deporting all undocumented migrants already within the country. yeah, that's not happening.

At best , its going to be performative on many things. Even with structural changes to the administrative state that the GOP's project 2025 seems to be promising - it's harder than it appears.

Regarding tariffs - China is currently in an economy slump. Trump being transactional in nature , its certain the Chinese will be open to bilateral agreements. So I don't see tariffs lasting long.

[lenkite]

He and Vance both said they would focus on criminal deportation first. Considering that most illegals breaking laws are just let loose free to commit crimes again by left-leaning states - those folks will now get to be kicked out like they should have been.

Then, he will apply his rule of: no adding regulation, unless you first remove regulation. The one-in, two-out program to cut regulatory costs. Considering he definitely did this in his last administration and did save ~$100 billion, reasonably certain he will do this again.

[nirav72]

yeah no doubt - he's going after the remain-in the U.S migrant policy that Biden implemented shortly after taking office in 2021. Those are going to be low hanging fruits. Same for other groups of migrants on temporary status, since they're easy to find. But I was referring to the 10-12 million that have been in the U.S for years. Those are going to be a lot harder, unless he has the infrastructure and resources in place to manage the logistics. Not saying they won't attempt it. But they'll hardly make a dent in the numbers. That's a huge number and will have a huge impact on the labor market. Whether positive or negative remains to be seen.

[bryanlarsen]

It's not in Trump's nature to do the work, but all he has to do is sign the bill. It's staffers that do the work.

In 2016 the staffers were mostly Bush people, and the 2016 presidency was mostly a Bush repeat.

In 2024 the staffers are going to be much different. If Trump gets a trifecta all bets are off -- we'll get policy set by whoever gets Trump's ear.

[mlcrypto]

Under the Biden/Harris administration even software engineers were hurting and couldn't find work. Unprecedented

[eadmund]

> even software engineers were hurting and couldn't find work. Unprecedented

Is the tech bust of 2000 so easily forgotten? And then the global financial crisis of 2008?

[globnomulous]

Yes, especially if your username is "mlcrypto."

[gortok]

It was a combination of factors: zero interest rate policies changed to fight inflation and the Tax Cut Jobs act of 2017 changes (section 174) requiring capitalization of everything softwsre development related except bug fixes went into effect for tax year 2022.

If software developer salaries cannot be expensed and it’s now 5 times more expensive to borrow money to expand, jobs will be lost.

Oh, and the TCJA was championed and signed into law by then President Trump.

[gruez]

>and the Tax Cut Jobs act of 2017 changes (section 174) requiring capitalization of everything softwsre development related except bug fixes went into effect for tax year 2022.

Seems like a stretch. "Software Development Job Postings on Indeed in the United States"[1] was up into the beginning of 2022. The tax changes were known in advance for years. If the tax code changes were a significant factor, why did companies hire a bunch of people in 2021, knowing that when 2022 rolled around there would be massive taxes?

[1] https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE

[gortok]

> Seems like a stretch. "Software Development Job Postings on Indeed in the United States"[1] was up into the beginning of 2022. The tax changes were known in advance for years. If the tax code changes were a significant factor, why did companies hire a bunch of people in 2021, knowing that when 2022 rolled around there would be massive taxes?

Gruez... Income Taxes are paid the year after they're incurred. Tax Year 2022 is filed and paid in 2023. The effects wouldn't start being felt until March 2023 at the earliest.

Also, literally everyone involved in tax policy thought it would be repealed. Heck, the IRS had to scramble to release guidance because they thought it was going to be repealed. The IRS didn't release detailed guidance on Section 174 until September 2023 -- six months after tax filings were due (a number of businesses asked for an extension to file but still had to pay the taxes as if they had filed on time). https://www.cohnreznick.com/insights/additional-guidance-irs...

The Section 174 capitalization for software development was included in the TCJA as a way to 'pay' for the tax cuts, but no one seriously believed it would stay in the law. The problem is congress is very dysfunctional, so once it was signed into law you'd need a congress to get it out. It's no surprise the congress in 2023 was more dysfunctional than the one in 2017.

Also, in 2021 interest rates were historically low, and as I stated initially the dual loss of the ZIRP environment and the massive change to how software developer policies worked together to kill software development jobs.

[gruez]

>Gruez... Income Taxes are paid the year after they're incurred. Tax Year 2022 is filed and paid in 2023. The effects wouldn't start being felt until March 2023 at the earliest.

First off, 2022 taxes are not paid in 2023. Corporations have to pay taxes quarterly, not yearly.

https://www.irs.gov/businesses/small-businesses-self-employe...

Second, no CFO is going to going to accept "this year's engineering expenses might be 100% more expensive (because we can't deduct it), but it's only due next year so we can keep on hiring!". The whole point of accounting is modeling the company's books to reflect its financial situation as accurately as possible, not just looking at whatever the bank balance is. This includes modeling future tax obligations.

[gortok]

Gruez. You pay payroll and estimated taxes quarterly. As long as you hit 90% of your actual tax burden, there are no penalties. You file income tax yearly and that sets you up for both your remaining burden that you didn't pay in estimated taxes, and your future estimated taxes. The trick is when you go to file by March 15th, you may or may not have accounted for all of the vagaries of tax changes -- and in fact the IRS pushes out guidance throughout the year that will affect the filing process.

For companies that were expensing 100% of developer salaries (which was a lot of them -- capitalization is very cash intensive), having to now eat 80% of that salary as profit and only being able to deduct 20% is devastating.

1171(!) small software companies have come together to try to get congress to repeal their changes to Section 174. They haven't been successful yet, but here's hoping that by further education of folks like yourself, they will be. https://ssballiance.org/

[nirav72]

Yeah. This is a thing lot of people don't understand or see . When they think of Software Developers - they tend to focus on SV companies or FANG. But most software devs work in corporate IT. In that world, IT is a cost center and rarely a profit center. So when cost of anything rises and they need to cut back to boast revenue numbers - it's always the cost center that takes the first hit. In this case, the cost of borrowing dramatically went up.

[romwell]

>Under the Biden/Harris administration even software engineers were hurting and couldn't find work. Unprecedented

Sure.

And why do you think that might be?

In other words, do you think policy changes have instantaneous effect on issues like unemployment, or perhaps they take some time?

[kukkamario]

It is rather annoying that larger policy changes easily take 2-4 years to actually affect anything so current party always gets both blame and thanks for the changes made by the previous administration.

[colechristensen]

Democrats insisted on COVID restrictions that were more like religion than science and then they just stopped and everyone was fine. The medical outcomes good and bad still happened, some of them just delayed.

The length and intensity of the restrictions were unnecessary, and the economic consequences of giving away trillions of dollars during them are why we’re in this economic situation.

What would have changed if the restrictions were 6 or 12 months shorter? Nothing.

[rpenm]

Not true, restrictive states had significantly lower mortality. Mask mandates being the most significant factor. The largest gaps in mortality occur in the latter half of 2020 and the latter half of 2021, during Delta.

https://jamanetwork.com/journals/jama-health-forum/fullartic...

[throwaway4220]

This ended up being true but is easy to say retrospectively though! I was in (irrationally) mortal fear everyday.

Maybe if Democrats just played the republican card and refused to sign stimulus package just out of spite we would not be here. Same with the bank bailout in 2009.

[colechristensen]

You can look at my posting history from the time, I was saying the same thing during the latter half of the lockdown

[svardilfari]

That's survivorship bias and thus your comment is just an opinion and nothing more. During restrictions covid vaccines were rapidly handed out and improved upon - this undoubtedly halted the spread of a virus that ultimately killed 1,212,000 people. So please go ask those peoples family and those people themselves if 'everyone was fine'

[romwell]

>Democrats insisted on COVID restrictions that were more like religion than science and then they just stopped and everyone was fine.

You... You missed out on the whole vaccines part here. Amazing.

>What would have changed if the restrictions were 6 or 12 months shorter?

Everyone would get hit with COVID before vaccines became available.

The healthcare systems were on the verge of collapse as it was; this would ensure the collapse and mass deaths (and long term disabilities for many others).

>Nothing

The confidence with which you're saying nonsense based on absolutely nothing is admirable, but the bullshit you're spouting isn't.

Next time, don't ask questions if your answer is premade.

[GlobalFrog]

Well, if you remember the 2016 elections, Trump was saying that the economy was extremely bad and disastrous. Then, within his first month of presidency, suddenly, the same numbers were extremely good because of him. During the Obama presidency, there had been a growth of 227000 jobs per month which became a growth of only 36000 jobs during the Trump years. During the last two years of Obama, the annual median household increased $4800, but only $1400 during the first two years of Trump. And then, under Biden the same annual median income was of $3250. And I could go on like that, except on the house prices which is the area where the pattern does not stand. So there are two things here: - Even if has been saying for the last months/years that the economy was a disaster,Trump will say within the first month of his presidency that the economy is already doing better immediately, while the numbers will be the very same at first. And when the economy will falter later on just like during his first term, his supporters won't mind because... - This election was not at all about the economy. This argument is an excuse for the real reasons why many Americans vote: more and more are susceptible to the cult of personality and to the progression of the most radical right-wing extremism ideas.

[matwood]

Yeah. Unless a POTUS is in for 8 years they almost never get to experience the full results of their economic policies.

Biden inherited an inflation time bomb which has been handled. I expect Trump will claim he fixed inflation the first report that comes out after the inauguration.

[mindslight]

A thousand times this. I don't know that Trump could have done a better job at economic sabotage when in office the first time. Printed trillions of dollars of undirected helicopter money when monetary velocity was low, which immediately went into asset inflation ("the stock market is great"). Then when things started moving again, it all started chasing goods and we got broad price inflation on top of acute shortages. The fact that the democrats just let the republicans hang Trump's economic destruction around their neck really shows how utterly inept they are at messaging. I shudder to think what inflation will be at in four years after a return to ZIRP corporate welfare and the next national emergency that's left to fester.

[throwaway2037]

"inflation time bomb". I never saw that term before. What was the primary cause of simultaneous inflation in all highly advanced economies, and how was Trump responsible for the US component?

[matwood]

He wasn't responsible for all of it. COVID supply chain disruption obviously played a huge part, but it's like everyone has forgotten that Trump also sent out a huge amount of money[1]. We can debate if that was the wrong/right move, but it's annoying when people blame Biden for the inflation that inevitably came once the economy turned back around. Trump has as much if not more responsibility depending on how you look at it. Meanwhile, the Fed under a Biden administration has seemingly engineered a soft landing.

Trump also pressed SA to cut oil production to help prop up gas prices in the US [2]. So when the economy turned demand surged back pushing prices higher.

[1] https://www.investopedia.com/coronavirus-aid-relief-and-econ...

[2] https://www.reuters.com/article/economy/special-report-trump...

[j0hnyl]

They do have an instantaneous effect. The unemployment rate is toggled using interest rates and the impact is seen immediately.

[romwell]

>But when people feel like their struggling to afford diapers and cereal most other issues become secondary.

Not entirely unreasonable.

Now, if only they had the brains to realize that the economy during the current term was shaped by the decisions made in the previous term.

Cue Trump's 2nd term being propped up by everything Biden did to un-fuck Trump's 1st term.

[poes-law]

Poe's law comes to mind for me here. But I guess this comment is sincere.