5 ms·

I hate these oversimplifications of monetary policy. Yes, inflation can be terrible, contributing measurably to quality of life decreases. But the alternative

by jcoq 5y ago

I hate these oversimplifications of monetary policy. Yes, inflation can be terrible, contributing measurably to quality of life decreases. But the alternative could potentially setoff another decade of sluggish growth, or worse yet, trigger a full fledged recession. Further, much of current inflation is being driven by goods that are highly sensitive to pandemic shortages and we expect this to be transitory. Like most things, there's no clear path. Anyone who tells you different wants you to vote a certain way.

dominotw 5y ago
> Like most things, there's no clear path. Anyone who tells you different wants you to vote a certain way. Then why does the govt say that there is a clear path of huge spending, low interest rates ect.
- jcoq 5y ago
  They don't. If you paid any attention to the Fed whatsoever, then you can see they're watching the situation very closely and signalling to markets that they'll take action when needed. Monetary policy isn't some secret. It's pretty easy to follow.
  - dominotw 5y ago
    > they'll take action when needed > It's pretty easy to follow. > Monetary policy isn't some secret. What is the decision tree for 'take action'? Why do we need to use "when needed" if its so clear and straightforward .
    - jcoq 5y ago
      > > they'll take action when needed > > It's pretty easy to follow. > > Monetary policy isn't some secret. > What is the decision tree for 'take action'? Why do we need to use "when needed" if its so clear and straightforward . Because I'm summarizing. Go pick up a Financial Times.
      - deleted 5y ago
        [deleted]
beiller 5y ago
How can we vote a certain way on fed policy? Voting has no impact on the fed. I thought the consensus was we need to allow companies to fail. The fed has absolutely manipulated what it means to have risk (making all investment zero risk) which has clearly created more inequality. There is also clearly a correlation between QE and asset prices exploding, or do you believe these current valuations are perfectly rational?
stadium 5y ago
> or worse yet, trigger a full fledged recession Why does a recession need to have a negative connotation? It's what a healthy economy does to get rid of market inefficiencies. Since the 2008 housing bubble popped, I noticed a general sense in the zeitgeist that recessions should be avoided at all costs. Is this not delaying the inevitable, or setting up an even bigger downturn in the future than what might have occurred more naturally?
- sundaeofshock 5y ago
  > Why does a recession need to have a negative connotation? It's what a healthy economy does to get rid of market inefficiencies. Because market inefficiencies get restless when they can’t pay the rent or feed their families. They might even pick-up pitchforks…
  - stadium 5y ago
    Wouldn't a better use of resources be to retrain people for new careers? Propping up failed businesses and obsolete jobs because "the economy" makes no sense to me.
    - randmeerkat 5y ago
      Yes, but the issue with this is offering free education to people so they can upskill and pay more in taxes is considered socialism, which means that any program would immediately be killed by the right.
- jcoq 5y ago
  A fed-engineered recession is certainly not ideal. But more broadly, I was talking about the tradeoffs of fighting inflation insofar as ordinary people are concerned.
tomjen3 5y ago
I admit that I don't know what is causing sluggish growth, but I see all the countries that are growing out of the poor group have much higher growth that we have had in decades. Isn't it reasonable to assume that we have simply (in most segments, clearly not consumer technology) hit the top of the S curve and that this has nothing much to do with government policy?
- jcoq 5y ago
  Yes, some economists started to worry about this along with our ability to hit 2% inflation targets. The concern is even greater in Europe and Japan. And currently, the hot US market is provoking conversations about this very thing.

by jcoq 5y ago

dominotw 5y ago

> Like most things, there's no clear path. Anyone who tells you different wants you to vote a certain way. Then why does the govt say that there is a clear path of huge spending, low interest rates ect.

jcoq 5y ago
They don't. If you paid any attention to the Fed whatsoever, then you can see they're watching the situation very closely and signalling to markets that they'll take action when needed. Monetary policy isn't some secret. It's pretty easy to follow.
- dominotw 5y ago
  > they'll take action when needed > It's pretty easy to follow. > Monetary policy isn't some secret. What is the decision tree for 'take action'? Why do we need to use "when needed" if its so clear and straightforward .
  - jcoq 5y ago
    > > they'll take action when needed > > It's pretty easy to follow. > > Monetary policy isn't some secret. > What is the decision tree for 'take action'? Why do we need to use "when needed" if its so clear and straightforward . Because I'm summarizing. Go pick up a Financial Times.
    - deleted 5y ago
      [deleted]

beiller 5y ago

How can we vote a certain way on fed policy? Voting has no impact on the fed. I thought the consensus was we need to allow companies to fail. The fed has absolutely manipulated what it means to have risk (making all investment zero risk) which has clearly created more inequality. There is also clearly a correlation between QE and asset prices exploding, or do you believe these current valuations are perfectly rational?

stadium 5y ago

> or worse yet, trigger a full fledged recession Why does a recession need to have a negative connotation? It's what a healthy economy does to get rid of market inefficiencies. Since the 2008 housing bubble popped, I noticed a general sense in the zeitgeist that recessions should be avoided at all costs. Is this not delaying the inevitable, or setting up an even bigger downturn in the future than what might have occurred more naturally?

sundaeofshock 5y ago
> Why does a recession need to have a negative connotation? It's what a healthy economy does to get rid of market inefficiencies. Because market inefficiencies get restless when they can’t pay the rent or feed their families. They might even pick-up pitchforks…
- stadium 5y ago
  Wouldn't a better use of resources be to retrain people for new careers? Propping up failed businesses and obsolete jobs because "the economy" makes no sense to me.
  - randmeerkat 5y ago
    Yes, but the issue with this is offering free education to people so they can upskill and pay more in taxes is considered socialism, which means that any program would immediately be killed by the right.
jcoq 5y ago
A fed-engineered recession is certainly not ideal. But more broadly, I was talking about the tradeoffs of fighting inflation insofar as ordinary people are concerned.

tomjen3 5y ago

I admit that I don't know what is causing sluggish growth, but I see all the countries that are growing out of the poor group have much higher growth that we have had in decades. Isn't it reasonable to assume that we have simply (in most segments, clearly not consumer technology) hit the top of the S curve and that this has nothing much to do with government policy?

jcoq 5y ago
Yes, some economists started to worry about this along with our ability to hit 2% inflation targets. The concern is even greater in Europe and Japan. And currently, the hot US market is provoking conversations about this very thing.