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This is seriously naive. The Fed doesn't set wages by committee. They are going to attempt to affect wages via rates. Wage cost spirals hurt the poor more than

by anm89 4y ago

This is seriously naive. The Fed doesn't set wages by committee. They are going to attempt to affect wages via rates. Wage cost spirals hurt the poor more than the rich although it hurts everbody. We already made the mistake. We already printed 4+ Trillion dollars and handed it out in a year. And we did it to mostly cheers from all sides. The time to stop this was then. Now they are going to do what they can to stop the inflation. It's their mandate to do so. So yell at congress not Powell if you don't like it.

arcticbull 4y ago
> We already printed 4+ Trillion dollars and handed it out in a year. This is a very incomplete model. First, the fiscal stimulus and low interest rates created the fastest exit from a depression-level event in modern history. It took about two years to get back to the point of near-complete employment. Historically this would have taken a decade. The Fed and Congress deserve credit for this. We would be so much worse off right now, facing a massive deflationary spiral and huge unemployment without that stimulus. The issue isn't that there's a ton of money floating around, although it's not helping. The issue is that there's supply chain issues, fuel, grain and neon shortages due to a land war in Europe. Everything shortages due to COVID zero lockdowns in Shanghai. And the knock-on effects from a hasty and poorly managed exit from lockdowns. The Austin airport literally ran out of avgas a few weeks ago. [1] None of that has anything to do with stimulus and everything to do with high prices. [1] https://www.aerotime.aero/articles/30609-austin-international-airport-fuel-shortage-missed-flights https://www.aerotime.aero/articles/30609-austin-internationa...
- anm89 4y ago
  Pick one or the other. We could have taken our medicine then or now. Turns out we are going to take it now. Yelling at the void isn't going to change that.
  - arcticbull 4y ago
    You're missing my point. It wasn't ever a case of 'medicine now or then' - we took the medicine before. It worked. Then some other stuff nobody could have foreseen (for real who had land war in Europe on their 2022 bingo card) caused a separate and in many ways unrelated crisis. The mistake is blending them together into one just because they happened back to back. Further, dealing with a massive deflationary spiral and everyone being out of work is fundamentally significantly harder than tackling supply-driven inflation. Inflation rates are already coming down significantly. The last monthly CPI print came in at 3.6% annualized, and month-over-month PPI came in at 0% for services and 1.3% for goods (driven by commodities of course). You are treating the $4T as a 'liability' without considering what it purchased. You're reading half a balance sheet. Spending can be inflationary or deflationary depending on what it's used for - and so many other factors. Japan has printed huge quantities of new money since 1990 and their CPI has been ~0% for the last 30 years. [1] [1] https://fred.stlouisfed.org/series/JPNCPIALLMINMEI https://fred.stlouisfed.org/series/JPNCPIALLMINMEI
    - anm89 4y ago
      No point was missed.

by anm89 4y ago

arcticbull 4y ago

> We already printed 4+ Trillion dollars and handed it out in a year. This is a very incomplete model. First, the fiscal stimulus and low interest rates created the fastest exit from a depression-level event in modern history. It took about two years to get back to the point of near-complete employment. Historically this would have taken a decade. The Fed and Congress deserve credit for this. We would be so much worse off right now, facing a massive deflationary spiral and huge unemployment without that stimulus. The issue isn't that there's a ton of money floating around, although it's not helping. The issue is that there's supply chain issues, fuel, grain and neon shortages due to a land war in Europe. Everything shortages due to COVID zero lockdowns in Shanghai. And the knock-on effects from a hasty and poorly managed exit from lockdowns. The Austin airport literally ran out of avgas a few weeks ago. [1] None of that has anything to do with stimulus and everything to do with high prices. [1] https://www.aerotime.aero/articles/30609-austin-international-airport-fuel-shortage-missed-flights https://www.aerotime.aero/articles/30609-austin-internationa...

anm89 4y ago
Pick one or the other. We could have taken our medicine then or now. Turns out we are going to take it now. Yelling at the void isn't going to change that.
- arcticbull 4y ago
  You're missing my point. It wasn't ever a case of 'medicine now or then' - we took the medicine before. It worked. Then some other stuff nobody could have foreseen (for real who had land war in Europe on their 2022 bingo card) caused a separate and in many ways unrelated crisis. The mistake is blending them together into one just because they happened back to back. Further, dealing with a massive deflationary spiral and everyone being out of work is fundamentally significantly harder than tackling supply-driven inflation. Inflation rates are already coming down significantly. The last monthly CPI print came in at 3.6% annualized, and month-over-month PPI came in at 0% for services and 1.3% for goods (driven by commodities of course). You are treating the $4T as a 'liability' without considering what it purchased. You're reading half a balance sheet. Spending can be inflationary or deflationary depending on what it's used for - and so many other factors. Japan has printed huge quantities of new money since 1990 and their CPI has been ~0% for the last 30 years. [1] [1] https://fred.stlouisfed.org/series/JPNCPIALLMINMEI https://fred.stlouisfed.org/series/JPNCPIALLMINMEI
  - anm89 4y ago
    No point was missed.