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In economics, this viewpoint is known as the "classical dichotomy" [0]. IMO it's a bit of a dangerous way of seeing things since it blinds you to some important

In economics, this viewpoint is known as the "classical dichotomy" [0]. IMO it's a bit of a dangerous way of seeing things since it blinds you to some important aspects of the economy. Inflation is particularly hard on people who don't have negotiating power, and in general those people aren't doing great to begin with. While the size of the pie is important, so is the means of distributing the pie and the assurance that pie will be served tomorrow. [0] https://en.wikipedia.org/wiki/Classical_dichotomy https://en.wikipedia.org/wiki/Classical_dichotomy

diob 5y ago
And what's more, the majority, vast majority have no negotiating power.
Ericson2314 5y ago
MM it's more complicated than that. The classical dichotomy people, simplified, think money is arbitrary like "inches" are arbitrary, and you can always choose different units. On hand hand, that's saying money doesn't matter, on the other hand, that's saying that, ignoring the coefficient, the "monetary economy" and "real economy" do the same things. Spending the time to talk about both separately is acknowledging the relationship is complex. That is good. --------- > Inflation is particularly hard on people who don't have negotiating power, and in general those people aren't doing great to begin with. This is extremely misleading. Read your https://delong.typepad.com/kalecki43.pdf https://delong.typepad.com/kalecki43.pdf - Inflation is good for debtors - Real wages have gone up since 2019! The poorest in this country have done the best! - Raising rate hurts poor people. Is there another plan to deal with this all? - There is still pandemic disruptions; people should increasing go do social things (consumption back to services) and that would ease pressure on the bottlenecks.
- NumberWangMan 5y ago
  Hmm, I take issue with one of your points. To say that real wages have gone up since 2019, does not mean that they wouldn't have gone up more if we had lower inflation. There are all sorts of reasons why real wages change. Maybe increased worker bargaining power as a result of the stimulus checks is a factor. As for raising rates hurting poor people -- inflation hurts poor people a lot too, especially if they're not in debt but are trying to save. Though to be fair, covid stimulus checks are one of the rare cases where increasing the money supply actually helps the poor because they're the ones who got the money, instead of banks, as I understand it.
  - Ericson2314 5y ago
    If we didn't do a stimulus we would probably have a huge recession and slow af recovery, just like 2009. That would be terrible for real wages. If we did do something about inflation, what would it be? How would it it effect those poor whose real wage had been going up?

diob 5y ago

And what's more, the majority, vast majority have no negotiating power.

Ericson2314 5y ago

MM it's more complicated than that. The classical dichotomy people, simplified, think money is arbitrary like "inches" are arbitrary, and you can always choose different units. On hand hand, that's saying money doesn't matter, on the other hand, that's saying that, ignoring the coefficient, the "monetary economy" and "real economy" do the same things. Spending the time to talk about both separately is acknowledging the relationship is complex. That is good. --------- > Inflation is particularly hard on people who don't have negotiating power, and in general those people aren't doing great to begin with. This is extremely misleading. Read your https://delong.typepad.com/kalecki43.pdf https://delong.typepad.com/kalecki43.pdf - Inflation is good for debtors - Real wages have gone up since 2019! The poorest in this country have done the best! - Raising rate hurts poor people. Is there another plan to deal with this all? - There is still pandemic disruptions; people should increasing go do social things (consumption back to services) and that would ease pressure on the bottlenecks.

NumberWangMan 5y ago
Hmm, I take issue with one of your points. To say that real wages have gone up since 2019, does not mean that they wouldn't have gone up more if we had lower inflation. There are all sorts of reasons why real wages change. Maybe increased worker bargaining power as a result of the stimulus checks is a factor. As for raising rates hurting poor people -- inflation hurts poor people a lot too, especially if they're not in debt but are trying to save. Though to be fair, covid stimulus checks are one of the rare cases where increasing the money supply actually helps the poor because they're the ones who got the money, instead of banks, as I understand it.
- Ericson2314 5y ago
  If we didn't do a stimulus we would probably have a huge recession and slow af recovery, just like 2009. That would be terrible for real wages. If we did do something about inflation, what would it be? How would it it effect those poor whose real wage had been going up?