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The data analysis and argumentation in this article is pretty broken. - The decade by decade plot, which is highly influenced by alignment of periods, actually

The data analysis and argumentation in this article is pretty broken. - The decade by decade plot, which is highly influenced by alignment of periods, actually shows a 50% drop in inflation from the 80s to the 90s. Then says that 90s policy mandates made no difference. - Fitting a linear trend to 100s of years of economic data with diverse data and economic regimes is meaningless wrt shorter-term policy. I guess we should expect -5% interest rate in 2100, because it dropped that fast between 1450 to 1550? - Similarly, the arguments that COVID or Brexit should simply be blips seems like an outright denial that economic change happens. Wars, epidemics, and trade agreements shape history by reordering which economies are competitive. I feel the need to say that I'm extremely in favor of spending on COVID relief etc, and I get the frustration that folks use FUD to complicate policy around social support spending until it fails. But the same thing happens around the spending itself. Late in the article the author discusses the way QE has been regressive, disproportionately impacting the rich. What makes anyone so confident that other forms of injecting money into the economy won't get siphoned the same way? We're getting to a dumb moment in this debate where people are accepting flimsier and flimsier arguments that we should be able to "Just Do It" regarding spending, without consequences. If we're going to do some economically radical things, let's do so with eyes open that we will be headed to uncharted territory.

carlosf 6y ago
> let's do so with eyes open that we will be headed to uncharted territory. That's how I think. In economics, society and very complex systems in general, one can rarely predict the consequences of most actions. The best we can do is brace ourselves (hedge) while those with power play their cards.
- blonde_ocean 6y ago
  So how are you hedging?
dundarious 6y ago
I agree it's somewhat weak on the historical trend argument, and in explaining the relevance of the interest rate to inflation argument. > - Similarly, the arguments that COVID or Brexit should simply be blips seems like an outright denial that economic change happens. Wars, epidemics, and trade agreements shape history by reordering which economies are competitive. He doesn't make a general case for such a denial. Only that COVID and Brexit are going to be blips specifically with respect to inflation. From the article: > If either Brexit of coronavirus cause an inflation blip it will not last, and we need not worry about it in that case. So neither is the ‘something else’ that must be motivating inflation fears. I found the arguments about the net money supply to be somewhat persuasive. And as for alternative QE money being siphoned and being similarly regressive, I'm inclined to agree with the redistribution part of daniel-s's comment, and to infer that direct cash payments to individuals resist being siphoned so easily: > Ultimately, printing money doesn't make anyone more productive or produce anything. All it does is redistribute wealth from those that were first to get the new free money away from those that were last to contact it. Edit: I assumed this meant it redistributes to the first to contact it, but on second reading, I’m not sure the intended meaning.
rebelos 6y ago
> Late in the article the author discusses the way QE has been regressive, disproportionately impacting the rich. What makes anyone so confident that other forms of injecting money into the economy won't get siphoned the same way? What the hell are you talking about? This isn't nearly as complicated as you think. It's been readily demonstrated that the consumption multiplier effect on unemployment transfers and bottom-up stimulus generally is far stronger than what can be accomplished with alternatives. This is intuitively obvious: give dollars to people who place the highest value on a marginal dollar (because they're using it for essentials) and you'll maximize consumption; give it to people at the other end and you'll maximize hoarding and wealth extraction.
- evrydayhustling 6y ago
  Well, I'm talking about the OP, which discussed deficit spending and and growing government but didn't get into specifics. It seems like you want to fight about direct bottom up stimulus, but I'm afraid I agree with you. Direct payments to individuals in particular seem really efficient right now. The comment you quote is about program-oriented deficit spending - including e.g. the USA's PPP - which can get captured by incumbent interests.

carlosf 6y ago

> let's do so with eyes open that we will be headed to uncharted territory. That's how I think. In economics, society and very complex systems in general, one can rarely predict the consequences of most actions. The best we can do is brace ourselves (hedge) while those with power play their cards.

blonde_ocean 6y ago
So how are you hedging?

dundarious 6y ago

I agree it's somewhat weak on the historical trend argument, and in explaining the relevance of the interest rate to inflation argument. > - Similarly, the arguments that COVID or Brexit should simply be blips seems like an outright denial that economic change happens. Wars, epidemics, and trade agreements shape history by reordering which economies are competitive. He doesn't make a general case for such a denial. Only that COVID and Brexit are going to be blips specifically with respect to inflation. From the article: > If either Brexit of coronavirus cause an inflation blip it will not last, and we need not worry about it in that case. So neither is the ‘something else’ that must be motivating inflation fears. I found the arguments about the net money supply to be somewhat persuasive. And as for alternative QE money being siphoned and being similarly regressive, I'm inclined to agree with the redistribution part of daniel-s's comment, and to infer that direct cash payments to individuals resist being siphoned so easily: > Ultimately, printing money doesn't make anyone more productive or produce anything. All it does is redistribute wealth from those that were first to get the new free money away from those that were last to contact it. Edit: I assumed this meant it redistributes to the first to contact it, but on second reading, I’m not sure the intended meaning.

rebelos 6y ago

> Late in the article the author discusses the way QE has been regressive, disproportionately impacting the rich. What makes anyone so confident that other forms of injecting money into the economy won't get siphoned the same way? What the hell are you talking about? This isn't nearly as complicated as you think. It's been readily demonstrated that the consumption multiplier effect on unemployment transfers and bottom-up stimulus generally is far stronger than what can be accomplished with alternatives. This is intuitively obvious: give dollars to people who place the highest value on a marginal dollar (because they're using it for essentials) and you'll maximize consumption; give it to people at the other end and you'll maximize hoarding and wealth extraction.

evrydayhustling 6y ago
Well, I'm talking about the OP, which discussed deficit spending and and growing government but didn't get into specifics. It seems like you want to fight about direct bottom up stimulus, but I'm afraid I agree with you. Direct payments to individuals in particular seem really efficient right now. The comment you quote is about program-oriented deficit spending - including e.g. the USA's PPP - which can get captured by incumbent interests.