I'm hoping for the AI bubble to pop. I want to see Nvidia and X and Tesla and Microslop and OpenAI all crash and burn.
But there's another part of me that knows there's a good historical precedent for what happens in these situations. My brain is zapped but Larry Fink was the architect of the previous market crash that led to BlackRock profiteering wildly and becoming the immense beast that it is today.
I know that the big AI companies/AI affiliated companies are what is keeping the US economy afloat at the moment and I know the US will play the "too big to fail" card to do yet-another immense transfer of wealth from the proles directly to these companies in the form of bailouts.
I don't think AI-only companies are gonna survive this. I think OpenAI might be the first domino to fall. But Google commands a vast amount of diversified income sources, unlike OpenAI, and I wonder if almost every other big player in AI will get swept under but, with big bailouts and the power that Google commands, it feels like they will be poised to gobble up all the smaller fish and expand their monopoly to integrate themselves into every level of government administration as the government cuts back on expenditures to weather the fallout from the bubble popping plus the immense cost of bailouts, so I can see it being a Faustian bargain where money goes into Google (either directly or indirectly), Google vacuums up all the business and especially the data centers, then Google offers the insolvent US government the "solution" of selling them terminals for every citizen interfacing role that runs on AI and embedding AI in all sorts of bureaucratic processes that occur mostly behind the scenes. For a "small" fee, of course. (Or maybe Palantir or some scumfuck company like Larry Ellison's swoops in and profiteers from the fire sale as the market burns.)
(I'd explain all the fuckery with Larry Fink and BlackRock and how I anticipate the parallels to play out this time around but there's a lot of threads and I'd have to have the brain power available to brush up on the sources and weave the narrative together but that's not gonna happen for me today. Has TrueAnon covered BlackRock yet?)
Strange to think that the scenario of the AI bubble popping and causing all sorts of economic catastrophe for the working class people around the world while the US starts to crumble and descend into fascism and civil war is my optimistic take and that my doomer take is that AI collapses but it doesn't take the market with it and instead AI gets monopolized, bailed out, and forcibly integrated into all levels of society while the US descends into fascism and civil war.
Is there a contradiction there though?
I'm not that finance minded but the current bubble is keeping the economy afloat yet it's inflationary and so if it pops, the economy is seriously fucked especially because you have Tesla exposed (itself its own bubble that apparently cannot build cars anymore) and Tesla is a big domino to fall in terms of the US economy, but to pull out of a bubble pop like this would basically require bailouts (because the only thing the US economy does during these cyclical crises is bailouts, eat hot chip and lie) except that the US debt is becoming unserviceable even under the current circumstances of relative stability. Feels like it's a choice between letting it pop and watching as so much comes tumbling down, which is gonna be catastrophic for whichever party is left holding the bag, or to bailout hard and fast to kick the can down the road especially in terms of debt servicing so that the next administration has to deal with it all blowing up in their faces. (Call me a cynic but it feels like if this shit doesn't pop very soon then whoever gets elected to the White House is gonna be handed a poisoned chalice, and maybe in pure political terms this would be the best outcome for the more extreme reactionary wing of the two right wings of the two party duopoly.)
There's a lot of moving parts so I get that it's a bit of a crystal ball case but also I don't understand all the moving parts nearly enough. Feels like bailouts would be a slightly delayed economic disaster and no bailouts would be a more immediate economic disaster yet I'm unsure if there's any viable off-ramp that the US government would be willing to take (obviously it's not gonna nationalize any industries so the more sensible and long-term responsible options seem off the table due to the prevailing economic orthodoxy.)
Govt debt should be seen as having two sides. As Kalecki's profit equation showed
Profit = Capitalist Investment + Govt Deficit + Foreign Surplus - Worker Saving
So, Govt Deficit increases profits and financial wealth of the capitalists as long as it's not going to Workers (which it isn't mostly). And this can keep going despite rising Govt 'Debt' (keep in mind money itself is debt, and what people call Govt 'Debt' i.e. Treasuries is basically just interest bearing cash) because Govt accommodates hoarding demands of capitalists.
There is a way to eliminate this debt, by destroying the financial wealth hoards of capitalists. Govt's unwillingness to do that will result in them accumulating more and more of it. And whether it causes problems depends on where the money is going, it can result in over-investments like in AI right now, or it could flow to asset prices (like stocks) and prop those markets up. But US Gov can always keep increasing its debt to accommodate capitalist desire to hoard.