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He certainly has a fair point. The problem, however, these days, is the way a monetary policy hyper-focused on eliminating inflation swindles the wage-earner.

by CPLX 9y ago

ergothus 9y ago
I'm by no means well-educated on finance. However, it seems like inflation has been the boogeyman of every major policy decision in the US for the decades I've been watching. So far, the dire predictions haven't come true, but we've faced growing wage inequality for 30 years. I've read that the Fed has a dual mission - keep inflation/deflation in check and unemployment at healthy levels, but I only ever hear their concern for inflation risks. As a result I tend to discount concerns over inflation, assuming that the major problem will be the issue we aren't addressing...is my reaction reasonable?
- sidibe 9y ago
  All central banks have been focused on the other issue since 2008. No one has been very worried about inflation until very recently.
  - ergothus 9y ago
    Banks, perhaps. Everyone else (conservative pundits, fiscal pundits) seem to be declaring imminent crippling inflation on a regular basis, yet it never seems to happen, even when the banks/govt take the action (or don't take the remedy) to this threat. Qe1 and Qe2 in the US were both accompanied by much hand wringing and doomsaying (for example), but the logic of the fear never made sense to me.
- Godel_unicode 9y ago
  The Fed has used both lack of employment growth and lack of wage growth multiple times to explain holding off on raising rates.
  - ergothus 9y ago
    Yes, but they've also raised rates a number if times in the last few decades over -fears- of inflation that wasn't yet present, even with employment/wages weak. The Fed tries not to screw employment up, but I've not heard if them taking action to impact employment while they will for inflation. Even when inflation is too low by the Fed targets. All of this, however, is my only lightly informed opinion so I am open to being shown any errors.
pjc50 9y ago
The trouble with being a wage-earner in inflationary times is that you constantly have to argue for pay rises, which are far from automatic. This is partly why there were so many strikes in the 1970s.
- jcomis 9y ago
  And that's just to plateau.
- dnautics 9y ago
  The irony is that it is an economic precept that pay rises magically happen and are endowed upon the laborer. At the same time, screwing the laborer out of the value of their wages is a deliberate policy of inflation: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...
dnautics 9y ago
That's backwards. Inflation swindles the wage earner. Have you ever been a wage earner?

He certainly has a fair point. The problem, however, these days, is the way a monetary policy hyper-focused on eliminating inflation swindles the wage-earner.

by CPLX 9y ago

He certainly has a fair point. The problem, however, these days, is the way a monetary policy hyper-focused on eliminating inflation swindles the wage-earner.

ergothus 9y ago

I'm by no means well-educated on finance. However, it seems like inflation has been the boogeyman of every major policy decision in the US for the decades I've been watching. So far, the dire predictions haven't come true, but we've faced growing wage inequality for 30 years. I've read that the Fed has a dual mission - keep inflation/deflation in check and unemployment at healthy levels, but I only ever hear their concern for inflation risks. As a result I tend to discount concerns over inflation, assuming that the major problem will be the issue we aren't addressing...is my reaction reasonable?

sidibe 9y ago
All central banks have been focused on the other issue since 2008. No one has been very worried about inflation until very recently.
- ergothus 9y ago
  Banks, perhaps. Everyone else (conservative pundits, fiscal pundits) seem to be declaring imminent crippling inflation on a regular basis, yet it never seems to happen, even when the banks/govt take the action (or don't take the remedy) to this threat. Qe1 and Qe2 in the US were both accompanied by much hand wringing and doomsaying (for example), but the logic of the fear never made sense to me.
Godel_unicode 9y ago
The Fed has used both lack of employment growth and lack of wage growth multiple times to explain holding off on raising rates.
- ergothus 9y ago
  Yes, but they've also raised rates a number if times in the last few decades over -fears- of inflation that wasn't yet present, even with employment/wages weak. The Fed tries not to screw employment up, but I've not heard if them taking action to impact employment while they will for inflation. Even when inflation is too low by the Fed targets. All of this, however, is my only lightly informed opinion so I am open to being shown any errors.

pjc50 9y ago

The trouble with being a wage-earner in inflationary times is that you constantly have to argue for pay rises, which are far from automatic. This is partly why there were so many strikes in the 1970s.

jcomis 9y ago
And that's just to plateau.
dnautics 9y ago
The irony is that it is an economic precept that pay rises magically happen and are endowed upon the laborer. At the same time, screwing the laborer out of the value of their wages is a deliberate policy of inflation: https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

dnautics 9y ago

That's backwards. Inflation swindles the wage earner. Have you ever been a wage earner?