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The AI boom is more overhyped than the 1990s dot-com bubble, says top economist (www.techspot.com)

submitted 3 weeks ago by cm0002@programming.dev to c/economics@lemmy.world

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[–] peoplebeproblems@midwest.social 1 points 3 weeks ago (1 children)

Well that's just it. People don't need AI to live, and only AI investors stand to lose anything (and anyone who had a retirement that got invested in it).

But the real estate market, which has been growing exponentially faster since the 1990s (while median income has been linear) has created a bubble that will be broken by some market event, something where real estate investors sell. That's rare and it could only happen with something with a stupid sharp decline like you just described. I don't know if the AI bubble is big enough itself to do it.

But I don't think it will be residential real estate to collapse first, it will be commercial real estate. Once that happens, it's going to be a free fall and bring everything else with it.

[–] naught101@lemmy.world 1 points 3 weeks ago

Oh I thought you meant the GFC subprime mortgage bubble.

I'm not sure that I would think of the current housing crisis is a bubble.. It's based on undeniably real value.. It absolutely is an unethical hoarding of wealth by the wealthy, but it's not imaginary like a bubble.

Well.. Unless you consider all of capitalism a bubble (in the sense that a massively inequal society is inherently unstable in the long run). Which I kinda do.