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job creators have been printing money for more than a decade, with the powerful policy lever of "do not let working people get it, it will cause inflation" .. m

job creators have been printing money for more than a decade, with the powerful policy lever of "do not let working people get it, it will cause inflation" .. meanwhile check out the price behavior of appreciating assets, and important upper-middle class consumables. The stock market beating value records is not even reported since it occurs so often. The parent comment here amounts to "if working people get more money they will cause inflation"

robertlagrant 4y ago
None of that is inflating. Real money, voluntarily given, backs any investments. Valuations are just the price of the last share sold multiplied by the number of shares. They aren't to do with inflation. Inflation (in the US) is caused in Washington DC. Printing more money to spend, subtly taxing everyone by that increased percentage, and by policy.
- jjoonathan 4y ago
  Printing $4T+ into asset markets didn't cause inflation, but printing $0.4T+ into peasant hands did? Uh-huh.
  - 988747 4y ago
    Putting money into asset markets causes "asset inflation" (see Nasdaq skyrocketing, until recently), putting it into "peasant hands" causes "peasant goods" inflation (hence the food or gas prices rising).
    - AlexandrB 4y ago
      At least part of this doesn't make sense. Why would giving people more money cause food price inflation? Were they not eating before? Did the demand for food skyrocket because people had money? Unless you're suggesting that food prices rose because food producers saw they were leaving money on the table, but this seems like a problem that could be solved with antitrust since collusion would be required to "artificially" raise prices in concert.
      - creato 4y ago
        People change their food choices when they have more money, yes.
      - robertlagrant 4y ago
        FMCG businesses try extremely hard to keep their costs low because their margins are razor thin, because competition means they must. If people feel comfortable paying even slightly more for goods, then the massive efforts to keep prices down can relax ever so slightly, and they can make more money in other areas (e.g. putting the money into decor or other nonessential feelgood factors that consumers will prioritise over prices).
    - dgb23 4y ago
      "Peasant goods" rise in price because the owners demand it after seeing an opportunity to do so. They could just keep stable. What is happening since half a century is that wealth gets shoveled to the top, with the above mechanism plus many others, while "peasants" can't afford their own place and education for themselves and their children anymore. They get cut off from sustainable spending and get turned back into pre-war wage slaves. What will happen is either owners getting to their senses and stop extracting so much god damn stuff for themselves for no reason, or workers rising up. Hiding behind political BS and pseudo science is a short term strategy that always ends in tears.
      - AstralStorm 4y ago
        Also it's probably educational that the "peasant good" that exploded is actually fuel, which has far reaching consequences, and zero rationale for getting more expensive. What that did was vacuum a lot of money off the market, additionally causing compensatory raised prices because there's an excuse. The market never works on supply and demand, not even money, it works on increasing prices every other excuse to the maximum level unless it's forced not to.
  - JumpCrisscross 4y ago
    > Printing $4T+ into asset markets didn't cause inflation, but printing $0.4T+ into peasant hands did? Fiscal policy is far more powerful, monetarily speaking, than monetary policy. It's not 10x more powerful. But a dollar the Treasury creates is minted. A dollar the Fed creates is lent against an asset. It's a small difference with massive multiplier implications. (It's why, in a crisis, fiscal responses are so pleadingly called for by economists and central bankers.)
    - jjoonathan 4y ago
      Yeah, if you print money and give it to rich people they are less likely to spend it in the real economy. It still increases the purchasing power of rich people. It still pumps assets, favoring asset holders at the expense of asset purchasers. It's still weaponized class warfare. If you want to call this something other than money printing -- "lending," for instance -- I'm going to ask you to put money where your mouth is and bet that the Fed actually reduces its balance sheet to zero in some time frame. I have a sneaking suspicion that you will not be keen on taking this bet.
  - politician 4y ago
    A financial instrument does not require as many physical raw materials to produce as fuels, food, computers, or homes. Indeed, they often don't require anything but bits. It seems obvious that the $4T deployed into the imaginary playground of the asset markets wouldn't cause near as much inflation as $0.4T+ in the hands of peasants with their needs for tangible goods. If traders attempted to move $4T en masse into purchases at retail, the system would have crashed immediately.
- jonnycomputer 4y ago
  When Congress spends money, it doesn't print it. It borrows it, at interest. Everyone talks about the national debt, but then they start talking about printing dollars in the next breath. Makes no sense. New money comes through the banking system, not Congress, and banks create money when they lend--a decision that depends on economic factors. However, when Congress moves around money, e.g. by borrowing from investors to give checks to lower income and middle class folks, that can cause inflation by shifting dollars to where they will be used for consumption rather than in investments, which tend to increase productivity which offsets inflationary effects of spending. However spending on lower income folks is almost surely a good bet in the long term, and while it may be inflationary in the short term, in the long term it must increase the productivity of the work force (and its inflationary effects can go away as soon as production in expectation of increased demand of those consumer goods ramps up).
  - robertlagrant 4y ago
    Well, true. Not literal printing :) For increasing the money supply my understanding is nothing to do with Congress - QE is the central bank purchasing (with new money) longer-term securities, and the other main process (I don't know the name of it) is where the central bank lends money (new money) to a commercial bank, which agrees to set some of it aside, and they can re-lend the rest out to other commercial banks. But neither process is borrowing. Those processes increase the money supply, which requires prices to go up, which requires wages to go up (or vice versa). Asset inflation is totally different, which was my original point.
encryptluks2 4y ago
Yeah.. they would be the type when billionaires and corporations cause pollution to destroy the earth to say.. it was your fault too. I might be 0.000000005% responsible for something but that doesn't mean that the people majorly responsible shouldn't have to do more to fix the issue.
fundad 4y ago
And none of this mentions Trillions in tax cuts and tariffs raising the cost of building materials and manufacturing inputs. Anyone paying attention in 2017 saw inflation coming but it became problem number 1 once the Muslim ban was reversed. Eat the rich.
carapace 4y ago
I've come to believe that the whole "wage increases cause inflation" meme, while perhaps not strictly false, is pushed largely by two groups: economic fundamentalists who see economics more as a religion than a tool, and apologists for the rich (who break down into subgroups: e.g. paid shills, temporarily embarrassed millionaires, and Stockholm Syndrome sufferers.) In any event, it's blindingly obvious to the rest of us that today's inflation is caused by profiteering on the part of large corporations and Private Equity, etc. The Haves are having more of the pie. I just want to reiterate this in case anyone's feeling gaslighted by the relentless propaganda ("If we pay you more we have to charge you more, silly workers." BS.)
AnimalMuppet 4y ago
"Job creators" don't "print money", in any sense. The Fed, sure. Banks arguably do also. But job creators? No.
- mistrial9 4y ago
  it is a catchy political news term with some kind of fuzzy meaning -- lots of readers did read it that way

robertlagrant 4y ago

None of that is inflating. Real money, voluntarily given, backs any investments. Valuations are just the price of the last share sold multiplied by the number of shares. They aren't to do with inflation. Inflation (in the US) is caused in Washington DC. Printing more money to spend, subtly taxing everyone by that increased percentage, and by policy.

jjoonathan 4y ago
Printing $4T+ into asset markets didn't cause inflation, but printing $0.4T+ into peasant hands did? Uh-huh.
- 988747 4y ago
  Putting money into asset markets causes "asset inflation" (see Nasdaq skyrocketing, until recently), putting it into "peasant hands" causes "peasant goods" inflation (hence the food or gas prices rising).
  - AlexandrB 4y ago
    At least part of this doesn't make sense. Why would giving people more money cause food price inflation? Were they not eating before? Did the demand for food skyrocket because people had money? Unless you're suggesting that food prices rose because food producers saw they were leaving money on the table, but this seems like a problem that could be solved with antitrust since collusion would be required to "artificially" raise prices in concert.
    - creato 4y ago
      People change their food choices when they have more money, yes.
    - robertlagrant 4y ago
      FMCG businesses try extremely hard to keep their costs low because their margins are razor thin, because competition means they must. If people feel comfortable paying even slightly more for goods, then the massive efforts to keep prices down can relax ever so slightly, and they can make more money in other areas (e.g. putting the money into decor or other nonessential feelgood factors that consumers will prioritise over prices).
  - dgb23 4y ago
    "Peasant goods" rise in price because the owners demand it after seeing an opportunity to do so. They could just keep stable. What is happening since half a century is that wealth gets shoveled to the top, with the above mechanism plus many others, while "peasants" can't afford their own place and education for themselves and their children anymore. They get cut off from sustainable spending and get turned back into pre-war wage slaves. What will happen is either owners getting to their senses and stop extracting so much god damn stuff for themselves for no reason, or workers rising up. Hiding behind political BS and pseudo science is a short term strategy that always ends in tears.
    - AstralStorm 4y ago
      Also it's probably educational that the "peasant good" that exploded is actually fuel, which has far reaching consequences, and zero rationale for getting more expensive. What that did was vacuum a lot of money off the market, additionally causing compensatory raised prices because there's an excuse. The market never works on supply and demand, not even money, it works on increasing prices every other excuse to the maximum level unless it's forced not to.
- JumpCrisscross 4y ago
  > Printing $4T+ into asset markets didn't cause inflation, but printing $0.4T+ into peasant hands did? Fiscal policy is far more powerful, monetarily speaking, than monetary policy. It's not 10x more powerful. But a dollar the Treasury creates is minted. A dollar the Fed creates is lent against an asset. It's a small difference with massive multiplier implications. (It's why, in a crisis, fiscal responses are so pleadingly called for by economists and central bankers.)
  - jjoonathan 4y ago
    Yeah, if you print money and give it to rich people they are less likely to spend it in the real economy. It still increases the purchasing power of rich people. It still pumps assets, favoring asset holders at the expense of asset purchasers. It's still weaponized class warfare. If you want to call this something other than money printing -- "lending," for instance -- I'm going to ask you to put money where your mouth is and bet that the Fed actually reduces its balance sheet to zero in some time frame. I have a sneaking suspicion that you will not be keen on taking this bet.
- politician 4y ago
  A financial instrument does not require as many physical raw materials to produce as fuels, food, computers, or homes. Indeed, they often don't require anything but bits. It seems obvious that the $4T deployed into the imaginary playground of the asset markets wouldn't cause near as much inflation as $0.4T+ in the hands of peasants with their needs for tangible goods. If traders attempted to move $4T en masse into purchases at retail, the system would have crashed immediately.
jonnycomputer 4y ago
When Congress spends money, it doesn't print it. It borrows it, at interest. Everyone talks about the national debt, but then they start talking about printing dollars in the next breath. Makes no sense. New money comes through the banking system, not Congress, and banks create money when they lend--a decision that depends on economic factors. However, when Congress moves around money, e.g. by borrowing from investors to give checks to lower income and middle class folks, that can cause inflation by shifting dollars to where they will be used for consumption rather than in investments, which tend to increase productivity which offsets inflationary effects of spending. However spending on lower income folks is almost surely a good bet in the long term, and while it may be inflationary in the short term, in the long term it must increase the productivity of the work force (and its inflationary effects can go away as soon as production in expectation of increased demand of those consumer goods ramps up).
- robertlagrant 4y ago
  Well, true. Not literal printing :) For increasing the money supply my understanding is nothing to do with Congress - QE is the central bank purchasing (with new money) longer-term securities, and the other main process (I don't know the name of it) is where the central bank lends money (new money) to a commercial bank, which agrees to set some of it aside, and they can re-lend the rest out to other commercial banks. But neither process is borrowing. Those processes increase the money supply, which requires prices to go up, which requires wages to go up (or vice versa). Asset inflation is totally different, which was my original point.

encryptluks2 4y ago

Yeah.. they would be the type when billionaires and corporations cause pollution to destroy the earth to say.. it was your fault too. I might be 0.000000005% responsible for something but that doesn't mean that the people majorly responsible shouldn't have to do more to fix the issue.

fundad 4y ago

And none of this mentions Trillions in tax cuts and tariffs raising the cost of building materials and manufacturing inputs. Anyone paying attention in 2017 saw inflation coming but it became problem number 1 once the Muslim ban was reversed. Eat the rich.

carapace 4y ago

I've come to believe that the whole "wage increases cause inflation" meme, while perhaps not strictly false, is pushed largely by two groups: economic fundamentalists who see economics more as a religion than a tool, and apologists for the rich (who break down into subgroups: e.g. paid shills, temporarily embarrassed millionaires, and Stockholm Syndrome sufferers.) In any event, it's blindingly obvious to the rest of us that today's inflation is caused by profiteering on the part of large corporations and Private Equity, etc. The Haves are having more of the pie. I just want to reiterate this in case anyone's feeling gaslighted by the relentless propaganda ("If we pay you more we have to charge you more, silly workers." BS.)

AnimalMuppet 4y ago

"Job creators" don't "print money", in any sense. The Fed, sure. Banks arguably do also. But job creators? No.

mistrial9 4y ago
it is a catchy political news term with some kind of fuzzy meaning -- lots of readers did read it that way