5 ms·

Yes, it's because of central bank policy since '08, which are equivalent to price controls of assets (bonds and mortgages aren't allowed to be too cheap). This

Yes, it's because of central bank policy since '08, which are equivalent to price controls of assets (bonds and mortgages aren't allowed to be too cheap). This directly benefits asset-holders in general and punishes everyone else. In the past, central banks in this sort of situation might have actually printed money instead. Actual printing of money is good for inequality—it distributes liquidity throughout the economy, encourages inflation, which effectively transfers wealth from current nominal asset-holders to debtors, and depending on how the money gets printed (e.g. use it to pay for a progressive tax credit), it can directly reverse inequality. Why didn't central banks print money? A main reason is because the way printing money works is it has to happen through well-capitalized banks, which didn't exist in the post-crisis era, and it was hugely politically unpopular to bail them out. Also, most people don't understand the Rube Goldberg machine of central bank policy and would've opposed money printing or inflation, even if it would've been the key to a real, broad-based economic recovery.

listenallyall 8y ago
>> most people don't understand and you sir, most certainly don't understand economics if you believe money printing and inflation are paths to prosperity. go check out venezuela
- Gibbon1 8y ago
  And you are deeply ignorant of you think that Venezuela which is under industrial and financial assault by the US and Europe is at all germane.
  - listenallyall 8y ago
    Lol. Venezuela made its own bed, its currency lost 99.99% of its value without any interference from foreign actors. Chavez's open friendship with Castro and harsh criticism of multiple US administrations was his own choice and set up the disastrous Maduro reign. However you interpret the actions in the past few months, it is in response to two decades of failed policies, resulting in unprecedented chaos, unemployment, scarcity and poverty. >> By November 2015, a multi university study found that about 73% of households and 76% of Venezuelans were living in poverty.[213] https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C3%A1s_Maduro_administration https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C... Would you, or 'smallnamespace,' like to provide counter-examples where high inflation and printing money led to prosperity?
    - smallnamespace 8y ago
      I think your response just proves my point, which is that people have a strong knee-jerk reaction to any level of inflation. There's quite a difference between a 3-5% level of inflation, which helps smooth shocks in the economy and forces the rich to participate in the real economy to keep the value of their money, vs. hyperinflation, which nobody is advocating for.
      - listenallyall 8y ago
        >> There's quite a difference... The difference is between inflation as a by-product of a powerful, growing, economic engine with healthy wage growth (unfortunate but acceptable) and deliberately generating inflation, via money-printing, as the means to stimulate a stagnant economy (pure foolishness).
        smallnamespace 8y ago
        This is in the context of the Great Recession which saw the largest sudden liquidity withdrawal from our monetary system in recent history. The point of printing money (which I'd like to emphasize did not happen, easily verified by the lack of broad price inflation in the last decade) is to get back closer to your baseline, not to goose an economy already at full employment (that just gets you the 1970s).
    - Gibbon1 8y ago
      > Would you, or 'smallnamespace,' like to provide counter-examples where high inflation and printing money led to prosperity? Define high inflation. Generally people like you think anything over 2% wage and price inflation[1] will result in utter doom. However the post war period up to the neoliberal revolution had inflation around 5% with peaks over 10%. And yet total growth and prosperity was higher then today. Even the maligned 1970's had significantly faster growth and shared prosperity than post 2000. [1] I say wage and price inflation because that's all people like you care about. Vs assets inflation which is running at 5-10% for the last ten years. Which is something people who don't believe in cargo cult economics do care about.
  - dmix 8y ago
    Venezuela’s economy was cracking even before their “oil crisis” (aka overspending in a non diversify). Even the countries in South America didn’t want to do business with them or be forced to take massive price cuts in order to serve their market under ridiculous top down price controls. Venezuela created their own mess.
- BubRoss 8y ago
  Money printing is a symptom of imposing banking controls while trying to keep appearances that the ruinous financial situation is not the fault of the current regime. International banking restrictions are the core reason Venezuela is in the position it is in.
Gibbon1 8y ago
Essentially all of the money created by central banks since 2008 has gone into the hands of speculators to drive up the price of existing assets (paper and real estate). Except for China which built out couple of trillion worth of infrastructure instead.

listenallyall 8y ago

>> most people don't understand and you sir, most certainly don't understand economics if you believe money printing and inflation are paths to prosperity. go check out venezuela

Gibbon1 8y ago
And you are deeply ignorant of you think that Venezuela which is under industrial and financial assault by the US and Europe is at all germane.
- listenallyall 8y ago
  Lol. Venezuela made its own bed, its currency lost 99.99% of its value without any interference from foreign actors. Chavez's open friendship with Castro and harsh criticism of multiple US administrations was his own choice and set up the disastrous Maduro reign. However you interpret the actions in the past few months, it is in response to two decades of failed policies, resulting in unprecedented chaos, unemployment, scarcity and poverty. >> By November 2015, a multi university study found that about 73% of households and 76% of Venezuelans were living in poverty.[213] https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C3%A1s_Maduro_administration https://en.wikipedia.org/wiki/Economic_policy_of_the_Nicol%C... Would you, or 'smallnamespace,' like to provide counter-examples where high inflation and printing money led to prosperity?
  - smallnamespace 8y ago
    I think your response just proves my point, which is that people have a strong knee-jerk reaction to any level of inflation. There's quite a difference between a 3-5% level of inflation, which helps smooth shocks in the economy and forces the rich to participate in the real economy to keep the value of their money, vs. hyperinflation, which nobody is advocating for.
    - listenallyall 8y ago
      >> There's quite a difference... The difference is between inflation as a by-product of a powerful, growing, economic engine with healthy wage growth (unfortunate but acceptable) and deliberately generating inflation, via money-printing, as the means to stimulate a stagnant economy (pure foolishness).
      - smallnamespace 8y ago
        This is in the context of the Great Recession which saw the largest sudden liquidity withdrawal from our monetary system in recent history. The point of printing money (which I'd like to emphasize did not happen, easily verified by the lack of broad price inflation in the last decade) is to get back closer to your baseline, not to goose an economy already at full employment (that just gets you the 1970s).
  - Gibbon1 8y ago
    > Would you, or 'smallnamespace,' like to provide counter-examples where high inflation and printing money led to prosperity? Define high inflation. Generally people like you think anything over 2% wage and price inflation[1] will result in utter doom. However the post war period up to the neoliberal revolution had inflation around 5% with peaks over 10%. And yet total growth and prosperity was higher then today. Even the maligned 1970's had significantly faster growth and shared prosperity than post 2000. [1] I say wage and price inflation because that's all people like you care about. Vs assets inflation which is running at 5-10% for the last ten years. Which is something people who don't believe in cargo cult economics do care about.
- dmix 8y ago
  Venezuela’s economy was cracking even before their “oil crisis” (aka overspending in a non diversify). Even the countries in South America didn’t want to do business with them or be forced to take massive price cuts in order to serve their market under ridiculous top down price controls. Venezuela created their own mess.
BubRoss 8y ago
Money printing is a symptom of imposing banking controls while trying to keep appearances that the ruinous financial situation is not the fault of the current regime. International banking restrictions are the core reason Venezuela is in the position it is in.

Gibbon1 8y ago

Essentially all of the money created by central banks since 2008 has gone into the hands of speculators to drive up the price of existing assets (paper and real estate). Except for China which built out couple of trillion worth of infrastructure instead.