Dean Baker Warns AI Bubble Could Echo 6.6 Million and 12 Million Job Forecast Misses
Updated
Updated · CounterPunch · May 21
Dean Baker Warns AI Bubble Could Echo 6.6 Million and 12 Million Job Forecast Misses
2 articles · Updated · CounterPunch · May 21
Baker argues an AI bubble burst would likely blindside mainstream forecasters, citing how CBO badly missed the fallout from the 2001 tech crash and 2008 housing collapse.
In 2001-03, CBO expected 4.5 million new jobs, but the economy instead lost 2.1 million before a weak rebound — a cumulative miss of 6.6 million jobs.
In 2008-10, CBO projected 4.5 million added jobs, yet the economy lost 8.5 million in 2008-09 and regained just 1 million in 2010, leaving a gap of more than 12 million jobs.
He says the damage from any AI unwind would depend not just on weaker spending by AI firms and a stock-market wealth hit, but on hidden vulnerabilities elsewhere — as AIG and mortgage-linked finance showed in 2008.
Is the colossal gap between AI spending and revenue masking financial risks that could spark the next major economic crisis?
As AI automates entry-level roles, is the traditional college-to-middle-class career path now permanently fractured?