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I think you diagnosed the problem, but not in the way that you think. We have huge price increases because the governments printed money for so long. Price inc

I think you diagnosed the problem, but not in the way that you think. We have huge price increases because the governments printed money for so long. Price increases were always predicted by free market economists. You don't make anyone wealthier by printing money. You don't build factories, make people smarter or increase resources. All it does is redistribute wealth to the first people that get to use the new money (banks and wealthy elites) and increase prices.

nostromo 4y ago
I'm well aware the cause of inflation is bad monetary policy. But now we have two options: control inflation by causing a severe downturn that will be painful, or control inflation with supply-side economics. We need to match supply and demand -- either by reducing demand with a recession, or by increasing the supply of goods and services. Increasing the supply side of the equation will be better for everyone.
lupire 4y ago
This isn't really relevant. Either formula buyers have more money and so they can afford formula, or they don't and so formula would not inflate as much as other products. Inflation only hurts when some buyers of a scarce good are benefiting more from money printing than others. This doesn't apply to consumer commodities.
pas 4y ago
> We have huge price increases because the governments printed money for so long. Not really. The unemployment checks did result in inflation, but the huge increase since November is because higher order supply chain issues (that started with the pandemic, ships waiting for unloading for many days, longshoreman on sick leave due to COVID, lack of empty containers, trucking industry problems, big swings of spending from services to products due to working from home, semiconductor shortages completely fucking up manufacturing schedules, then a few new waves of COVID in China, and so on). There's also a cascade effect that happens because if something is out of stock people will buy something else, so the price of that will go up initially, then it will also go out of stock, because the next batches are sitting in containers somewhere. > You don't make anyone wealthier by printing money. That's not how it works. Public spending has a fiscal multiplier, if that's greater than 1 then it does increase wealth. Public services, infrastructure, education, healthcare, all have high multipliers. Of course some have less than one, eg. giving tax credits to Amazon for moving their HQ, end of life hospitalization is arguably overdone in developed countries, a large chunk of military spending, spending public money on sports/stadiums, etc. On top of this printing money during a pandemic is extending credit in time, so the private sector doesn't start a contagious bankruptcy chain. ... Then after all this the Fed did wait too much to increase rates. (Mostly because the unemployment numbers were/are still high.)

nostromo 4y ago

I'm well aware the cause of inflation is bad monetary policy. But now we have two options: control inflation by causing a severe downturn that will be painful, or control inflation with supply-side economics. We need to match supply and demand -- either by reducing demand with a recession, or by increasing the supply of goods and services. Increasing the supply side of the equation will be better for everyone.

lupire 4y ago

This isn't really relevant. Either formula buyers have more money and so they can afford formula, or they don't and so formula would not inflate as much as other products. Inflation only hurts when some buyers of a scarce good are benefiting more from money printing than others. This doesn't apply to consumer commodities.

pas 4y ago

> We have huge price increases because the governments printed money for so long. Not really. The unemployment checks did result in inflation, but the huge increase since November is because higher order supply chain issues (that started with the pandemic, ships waiting for unloading for many days, longshoreman on sick leave due to COVID, lack of empty containers, trucking industry problems, big swings of spending from services to products due to working from home, semiconductor shortages completely fucking up manufacturing schedules, then a few new waves of COVID in China, and so on). There's also a cascade effect that happens because if something is out of stock people will buy something else, so the price of that will go up initially, then it will also go out of stock, because the next batches are sitting in containers somewhere. > You don't make anyone wealthier by printing money. That's not how it works. Public spending has a fiscal multiplier, if that's greater than 1 then it does increase wealth. Public services, infrastructure, education, healthcare, all have high multipliers. Of course some have less than one, eg. giving tax credits to Amazon for moving their HQ, end of life hospitalization is arguably overdone in developed countries, a large chunk of military spending, spending public money on sports/stadiums, etc. On top of this printing money during a pandemic is extending credit in time, so the private sector doesn't start a contagious bankruptcy chain. ... Then after all this the Fed did wait too much to increase rates. (Mostly because the unemployment numbers were/are still high.)