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Honest question: how can you prove the current inflation is not “transitory”? I have heard pretty good arguments for the idea that supply and demand are still

Honest question: how can you prove the current inflation is not “transitory”? I have heard pretty good arguments for the idea that supply and demand are still trying to find a new equilibrium in the post COVID demand shock. What is the specific criteria that was used to reject transitory? I tend to be skeptical of anyone who accuses others of lying when there are obviously simpler reasonable explanations: it’s hard to predict how the entire economy will react to turning off the spigot.

mc32 4y ago
I don't need to prove it. The administration itself is admitting there is inflation, but now are pinning it on external factors rather than Federal spending as well as policy by the Fed reserve bank. Indicators were indication inflation before Feb 24. Inflation numbers for Jan and Feb has inflation at way above normal. So not just indicators but actual inflation was measured.
- thephyber 4y ago
  > The administration itself is admitting there is inflation That proves that the administration knows it has an optics issue, not that inflation isn’t transitory. Inflation is currently the number one issue on most voters minds. I don’t doubt that inflation exists. I doubt that a substantial portion of it is related to issues that won’t resolve themselves as the economy renormalizes post-COVID and buying habits return to something like pre-COVID.
  - mc32 4y ago
    So you're saying they'd prefer to lie to the people? It's number one because the admin tried to bury the issue by cliaming it was transitory while many outside DC and the Whitehouse were saying, you can't print money, do the BBB to the tune of trillions (where even Yellen balked) send out stimulus cheques, press for a $15 minimum wage (this should have been gradual), keep rates low AND expect there not to be inflation. But they said, nah, you're being chicken little, relax. Covid did stress the economy, but it would do the opposite of inflation, if they had not stepped on the gas. It dampened demand. It also put some people out of work and also encouraged some to leave the workforce early.
    - thephyber 4y ago
      The admin isn’t necessarily lying. They are trying to be responsive to peoples’ concerns by admitting there is inflation, which there is. Admitting there is inflation and they are taking steps is optics 101. I agree that many outside of DC jumped on Larry Summers’ bandwagon and are screaming that it was never transitory. But that still isn’t proven. And lots of those people happen to be political adversaries of Democrats, so they have additional reason to try and pin another problem on this president, whether it is his fault or not (which is what your Democrat wish list of things that never happened/passed so can’t affect inflation looks like). I would also note that you are mixing fiscal and monetary policy as if the White House admin had control over either. Printing money (expanding the M1 money supply at least 4x) and a near zero interest rate environment happened for a decade after 2008 with stubbornly low inflation. That doesn’t necessarily lead to inflation. COVID didn’t dampen demand for more than a month. It changed where demand was aimed. Money that pre-COVID went to restaurants, concerts, and travel was aimed at different goods like home improvements, in-home entertainment, and crypto/stonks. Inflation didn’t show up when households were thrown $1600, unemployment insurance claims saw richer payouts, and PPP was issued. It happened after buying and spending habits changed when people came out of hibernation and were spite spending. Again, I’m not saying inflation isn’t transitory. I’m saying I don’t think we can know for sure until the supply-demand mismatches created by COVID lockdowns and behavioral changes have returned to some equilibrium. Only then might we have enough info to be sure, especially because transitory opponents will not set goal posts for the definition. The only one solid piece of evidence I see for some kind of sustained inflation was the Great Resignation, where people were changing their desires and expectations for work and life. Combined with very little immigration since Trump’s inauguration, and we have not enough supply of low paid labor.

mc32 4y ago

I don't need to prove it. The administration itself is admitting there is inflation, but now are pinning it on external factors rather than Federal spending as well as policy by the Fed reserve bank. Indicators were indication inflation before Feb 24. Inflation numbers for Jan and Feb has inflation at way above normal. So not just indicators but actual inflation was measured.

thephyber 4y ago
> The administration itself is admitting there is inflation That proves that the administration knows it has an optics issue, not that inflation isn’t transitory. Inflation is currently the number one issue on most voters minds. I don’t doubt that inflation exists. I doubt that a substantial portion of it is related to issues that won’t resolve themselves as the economy renormalizes post-COVID and buying habits return to something like pre-COVID.
- mc32 4y ago
  So you're saying they'd prefer to lie to the people? It's number one because the admin tried to bury the issue by cliaming it was transitory while many outside DC and the Whitehouse were saying, you can't print money, do the BBB to the tune of trillions (where even Yellen balked) send out stimulus cheques, press for a $15 minimum wage (this should have been gradual), keep rates low AND expect there not to be inflation. But they said, nah, you're being chicken little, relax. Covid did stress the economy, but it would do the opposite of inflation, if they had not stepped on the gas. It dampened demand. It also put some people out of work and also encouraged some to leave the workforce early.
  - thephyber 4y ago
    The admin isn’t necessarily lying. They are trying to be responsive to peoples’ concerns by admitting there is inflation, which there is. Admitting there is inflation and they are taking steps is optics 101. I agree that many outside of DC jumped on Larry Summers’ bandwagon and are screaming that it was never transitory. But that still isn’t proven. And lots of those people happen to be political adversaries of Democrats, so they have additional reason to try and pin another problem on this president, whether it is his fault or not (which is what your Democrat wish list of things that never happened/passed so can’t affect inflation looks like). I would also note that you are mixing fiscal and monetary policy as if the White House admin had control over either. Printing money (expanding the M1 money supply at least 4x) and a near zero interest rate environment happened for a decade after 2008 with stubbornly low inflation. That doesn’t necessarily lead to inflation. COVID didn’t dampen demand for more than a month. It changed where demand was aimed. Money that pre-COVID went to restaurants, concerts, and travel was aimed at different goods like home improvements, in-home entertainment, and crypto/stonks. Inflation didn’t show up when households were thrown $1600, unemployment insurance claims saw richer payouts, and PPP was issued. It happened after buying and spending habits changed when people came out of hibernation and were spite spending. Again, I’m not saying inflation isn’t transitory. I’m saying I don’t think we can know for sure until the supply-demand mismatches created by COVID lockdowns and behavioral changes have returned to some equilibrium. Only then might we have enough info to be sure, especially because transitory opponents will not set goal posts for the definition. The only one solid piece of evidence I see for some kind of sustained inflation was the Great Resignation, where people were changing their desires and expectations for work and life. Combined with very little immigration since Trump’s inauguration, and we have not enough supply of low paid labor.