AI is propping up the US economy

Real AGI would be alive and would be capable of art and music and suffering and community, of course. So there would really be no more need for humans except to shovel the coal (or bodies of other humans) into the furnace that power the Truly Valuable members is society, the superintelligent AIs, which all other aspects of our society will be structured towards serving.

Real AGI might realistically decide to go to war with us if we've leaned anything from current LLMs and their penchant for blackmail

Modern AI is not an intelligence. Wonder what crap they are calling AGI.

https://www.pewresearch.org/short-reads/2022/12/08/about-fou...

It doesn’t cover the free users, but that’s normal startup strategy. They are using investor cash to grow as quickly as possible. This involves providing as much free service as they can afford so that some of those free users convert to paid customers. At any point they can decide not to give so much free service away to rebalance in favour of profitability over growth. The cost of inference is plummeting, so it’s getting cheaper to service those free users all the time.

> It’s like those extremely cheap food and grocery delivery apps, they made their food cheap, no delivery fees for a while… […] they started to run out of VC money, they had to raise prices

That’s not the same situation because that makes the product more expensive for the customers, which will hit sales. This isn’t the same as cutting back on a free tier, because in that situation you’re not doing anything to harm your customers’ service.

Others have observed and pointed out his prescience before:

https://news.ycombinator.com/item?id=22364699

Eternal orgy time is not possible, will never happen. And if AI is useful, which it is, it will never be abandoned. Somewhere in the middle is the real prognosis

Make teachers great again.

In a majority agrarian economy where a lot of output doesn't go toward GDP (e.g. milking your own damn cow to feed milk to your own damn family won't show up) I would expect "new hotness" booms to look bigger than they actually are.

While GDP correlates reasonably well, imagine very roughly what it would be like if GDP growth averaged 3% annually while the overall economy grew at 2%. While correlation would be good, if we speculate that 80% of the economy is counted in GDP today, then only 10% would have been counted 200 years ago.

The US spends around 6.8k USD/capita/year on public health care. The UK spends around 4.2k USD/capita/year and France spends around 3.7k.

For general public social spending the numbers are 17.7k for the US, 10.2k for the UK and 13k for France.

(The data is for 2022.)

Though I realise you asked for sane policies. I can't comment on that.

I'm not quite sure why the grandfather commenter talks about unemployment: the US had and has fairly low unemployment in the last few decades. And places like France with their vaunted social safety net have much higher unemployment.

I think you're forgetting the Soviet Union, which looked great on paper until it turned out that it wasn't actually great...

Real GDP can go up, and it doesn't HAVE to mean you are producing more of anything valuable, and can - in fact - mean that you're not producing enough of what you need, and a bunch of what you don't need.

A very simple way to view this is: currently x% of GDP is waste. If Real GDP goes up 4% but the percentage of waste goes from 1% to 8% - you are clearly doing worse.

This is a reduction of what happened in the Soviet Union.

P/E is, after all, given in the implied unit of "years". (Same as other ratios like debt/GDP).

I'm already a pretty fast writer and programmer without LLMs. If I hadn't already learned how to write and program quickly, perhaps I would get more use out of LLMs. But the LLMs would be saving me the effort of learning which, ultimately, is an O(1) cost for O(n) benefit. Not super compelling. And what would I even do with a larger volume of text output? I already write more than most folks are willing to read...

So, sure, it's not strictly zero utility, but it's far less utility than a long series of other things.

On the other hand, trains are fucking amazing. I don't drive, and having real passenger rail is a big chunk of why I want to move to Europe one day. Being able to get places without needing to learn and then operate a big, dangerous machine—one that is statistically much more dangerous for folks with ADHD like me—makes a massive difference in my day-to-day life. Having a language model... doesn't.

And that's living in the Bay Area where the trains aren't great. Bart, Caltrain and Amtrak disappearing would have an orders of magnitude larger effect on my life than if LLMs stopped working.

And I'm totally ignoring the indirect but substantial value I get out of freight rail. Sure, ships and trucks could probably get us there, but the net increase in costs and pollution should not be underestimated.

Sure. They don't meaningfully improve anything in my life personally.

They don't improve my search experience, they don't improve my work experience, they don't improve the quality of my online interactions, and I don't think they improve the quality of the society I live in either

In fact much automation, code or otherwise, benefits from or even requires explicit, concise rules.

It is far quicker for me to already know, and write, an SQL statement, than it is to explain what I need to an LLM.

It is also quite difficult to get LLMs into a lot of processes, and I think big enterprises are going to really struggle with this. I would absolutely love AI to manage some Windows servers that are in my care, but they are three VMs deep in a remote desktop stack that gets me into a DMZ/intranet. There's no interface, and how would an LLM help anyway. What I need is concise, discreet automations. Not a chat bot interface to try and instruct every day.

To be clear I do try to use AI most days, I have Claude and I am a software developer so ideally it could be very helpful, but I have far less use for it than say people in the strategy or marketing departments for example. I do a lot of things, but not really all that much writing.

Analyze it this way: Are LLMs enabling something that was impossible before? My answer would be No.

Whatever I'm asking of the LLM, I'd have figured it out from googling and RTFMing anyway, and probably have done a better job at it. And guess what, after letting the LLM do it, I probably still need to google and RTFM anyway.

You might say "it's enabling the impossible because you can now do things in less time", to which I would say, I don't really think you can do it in less time. It's more like cruise control where it takes the same time to get to your destination but you just need to expend less mental effort.

Other elephants in the room:

- where is the missing explosion of (non-AI) software startups that should've been enabled by LLM dev efficiency improvements?

- why is adoption among big tech SWEs near zero despite intense push from management? You'd think, of all people, you wouldn't have to ask them twice.

The emperor has no clothes.

Anyway, that about sums up my experience with AI. It may save some time here and there, but on net, you’re better off without it.

I still do 10-20x regular Kagi searches for every LLM search, which seems about right in terms of the utility I'm personally getting out of this.

For me, LLMs are also the most useful thing ever but I was a C student in all my classes. My programming is a joke. I have always been intellectually curious but I am quite lazy. I have always had tons of ideas to explore though and LLMS let me explore these ideas that I either wouldn't be able to otherwise or would be too lazy to bother.

Nope; cloning a bundle created from a depth-limited clone results in error messages about missing commit objects.

So I tell the parrot that, and it comes back with: of course, it is well-known that it doesn't work, blah blah. (Then why wasn't it well known one prompt ago, when it was suggested as the definitive answer?)

Obviously, I wasn't in the "the right mindset" today.

This mindset is one of two things:

- the mindset of a complete n00b asking a n00b question that it will nail every time, predicting it out of its training data richly replete with n00b material.

- the mindset of a patient data miner, willing to expend all they keystrokes. needed to build up enough context to in effect create a query which zeroes in on the right nugget of information that made an appearance in the training data.

It was interesting to go down this #2 rabbit hole when this stuff was new, which it isn't any more. Basically do most of the work, while it looks as if it solved the problem.

I had the right mindset for AI, but most of it has worn off. If I don't get something useful in one query with at most one follow up, I quit.

The only shills who continue to hype AI are either completely dishonest assholes, or genuine bros bearing weapons-grade confirmation bias.

Let's try something else:

Q: "What modes of C major are their own reflection?"

A: "The Lydian and Phrygian modes are reflections of each other, as are the Ionian and Aeolian modes, and the Dorian and Mixolydian modes. The Locrian mode is its own reflection."

Very nice sounding and grammatical, but gapingly wrong in every point. The only mode that is its own reflection is Dorian. Furthermore, Lydian and Phrygian are not mutual reflections. Phrygian reflected around is root is Ionian. The reflection of Lydian is Locrian; and of Aeolian, Mixolydian.

I once loaded a NotebookLM with materials about George Russel's concept of the Lydian Chromatic, and Tonal Gravity. It made an incomprehensible mess of explaining the stuff, worse than the original sources.

AI performs well on whatever is the focus of its purveyors. When they want to shake down entry-level coding, they beef it up on entry-level coding and let it loose, leaving it unable to tell Mixolydian from mixing console.

Especially people on the left need to realize how important their vision is to the future if AI. Right now you can see the current US admin having zero concern for AI safety or carbon use. If you keep your head in the dirt saying “bubble!” that’s no problem. But if this is here to stay then you need to get involved.

I honestly don't see technology that stumbles over trivial problems like these as something that will replace my job, or any job that is not already automatable within ten thousand lines of Python, anytime soon. The gap between hype and actual capabilities is insane. The more I've tried to apply LLMs to real problems, the more disillusioned I've become. There is nothing, absolutely nothing, no matter how small the task, that I can trust LLMs to do correctly.

What does AI get the consumer? Worse spam, more realistic scams, hallucinated search results, easy cheating on homework? AI-assisted coding doesn't benefit them, and the jury is still out on that too (see recent study showing it's a net negative for efficiency).

Getting people to associate the luddites as anti-technology zealots rather than pro-labor organization is one of the most successful pieces of propaganda in history.

[0]: https://www.newyorker.com/books/page-turner/rethinking-the-l...

This sort of “other people were wrong once, so you might be too” comment is really pointless.

Luddites weren't at a point where every industry sees individual capital formation/demand for labor trend towards zero over time.

Prices are ratios in the currency between factors and producers.

What do you suppose happens when the factors can't buy anything because there is nothing they can trade. Slavery has quite a lot of historic parallels with the trend towards this. Producers stop producing when they can make no profit.

You have a deflationary (chaotic) spiral towards socio-economic collapse, under the burden of debt/money-printing (as production risk). There are limits to systems, and when such limits are exceeded; great destruction occurs.

Malthus/Catton pose a very real existential threat when such disorder occurs, and its almost inevitable that it does without action to prevent it. One cannot assume action will happen until it actually does.

The loom wasn't centralized in four companies. Customers of textiles did not need an expensive subscription.

Obviously average people would benefit more if all that investment went into housing or in fact high speed railways. "AI" does not improve their lives one bit.

the vast expense is on the GPU silicon, which is essentially useless for compute other than parallel floating point operations

when the bubble pops, the "investment" will be a very expensive total waste of perfectly good sand

It could have some unexciting applications like, oh, modeling climate change and other scientific simulations.

The first clause of that sentence negates the second.

The investment only makes sense if the the expectation of success * the investment < the payoff of that goal.

If I don't think the major AI labs will succeed, then it's not justified.

So they are talking about changes not levels.

Quite why we've persuaded ourselves we need to do this through a remote & deaf middleman is anyone's guess, when governments we elect could just direct money through policies we can all argue about and nudge in our own small ways.

The first cellular phone in modern currency cost something like $15,000. At that price, the market for it would be orders of magnitude below the present cellular phone market size. Lower the price 1 to 2 orders of magnitude and we have the present cellular phone market, which is so much larger than what it would have been with the cellular phone at $15,000.

Interestingly, the cellular phone market also seems to be in a period where competition is driving prices upward through market segmentation. This is the opposite of what you described competition as doing. Your remark that the real world is more complicated could not be more true.

If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it.

Have you heard of the disagreement hierarchy? You're somewhere between 1 and 3 right now, so I'm not even going to bother to engage with you further until you bring up more substantive points and cool it with the personal attacks.

https://paulgraham.com/disagree.html

See the dotcom bubble in the early 2000s for a perfect example. The Web is still useful, but the bubble bursting was painful.

However, my understanding is that the same GPUs can be used for both training and inference (potentially in different configurations?) so there is a lot of elasticity there.

That said, for the public clouds like Azure, AWS and GCP, training is also a source of revenue because other labs pay them to train their models. This is where accusations of funny money shell games come into play because these companies often themselves invest in those labs.

But for things to be much worse than the Great Depression, I think is an extraordinary claim. I see the ingredients for a Great Depression-scale event, but not for a much-worse-than-Great-Depression event.

It's already happening, past 6 months USD has been losing value against EUR, CHF, GBP, even BRL and almost flat against the JPY which was losing a ton of value the past years.

Simplifying an economic activity down to a single short formula leaves out a lot of important parameters and these kinds of things tend to hold some truth for the time they are invented and often break at some point in the near future after they are created. This is because of changes in money flows in the economy as a result of tax, regulation and technology changes.

Like the yield curve inversions and the Sahm rule and so on.

Precisely! Yet the big problem in the Anglosphere is that most of that money has been invested in asset accumulation, namely housing, causing a massive housing crisis in these countries.

Another way to look at this: Low interest rates can induce demand and drive inflation. But they also control the rates when financing supply-side production; so they can also ramp up supply to meet increased demand.

1. Not all goods and services are like this, obviously. Real estate is the big one that low interest rates will continue to inflate. We need legislative-side solutions to this, ideally focused at the state and local levels.

2. None of this applies if you have an economy culturally resistant to consumerism, like Japan. Everything flips on its head and things get weird. But that's not the US.

Not necessarily. Sure, it that money is chasing fixed assets like housing but if that money was invested into production of things to consume its not necessarily inflation inducing is it? For example, if that money went into expanding the electricity grid and production of electric cars, the pool of goods to be consumed is expanding so there is less likelihood of inflation.

https://ofdollarsanddata.com/sp500-calculator/

About what? Like seriously what would they even do other then try and lame duck him?

The big issue is Dem approval ratings are even lower then Trumps so how the hell are they going to gain any seats?

(I am an AI optimist, by the by. But that is not one of its success stories.)

There probably are a few nuts out there that actually fired people to be replaced with AI, I feel like that won't go well for them

There really is no evidence.