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You’re missing the parent’s point: in a counterfactual scenario, if as much money was handed directly in stimulus checks as was used to pump assets, the actual
by xyzzyz 4y ago
You’re missing the parent’s point: in a counterfactual scenario, if as much money was handed directly in stimulus checks as was used to pump assets, the actual inflation would be even worse, because velocity of stimulus money is much higher than velocity of asset.
- jjoonathan 4y agoNo, I did not miss the point that asset markets have lower velocity. Quite the opposite: I found it obvious and repulsively self-serving to invoke this as an excuse for rich people to print and pocket ten times as much money.
- sokoloff 4y agoI don't see anywhere that I said that it was a good excuse to do that, merely that (in a thread specifically about inflation) I commented on the relative impact on inflation of high-velocity money vs low-velocity money.
- jjoonathan 4y agoYou repeated a talking point that has been widely invoked to rationalize printing lots of low-velocity money.
- titzer 4y agoAnd yet people have argued for decades that stimulus money going to corporations is multiplied many times over because those corporations supposedly create jobs which supposedly creates even more economic activity. Why is it not the case that stimulus money to corporations creates multiplicative inflationary effects in the same way?
- sokoloff 4y agoCompanies grow by producing supply of products/services for sale. They also turn around and employ staff. The first sentence represents the creation of supply; the second the creation of demand [via the payments of wages]. That's much more balanced than if you just give money to consumers, increasing demand without a corresponding increase in supply.
- jjoonathan 4y agoYou conveniently left out the part where they are entitled to pocket it if they can, sending it straight into rich peoples' brokerage accounts, where it was intended to go all along. Yes, the brokerage accounts of rich people have less velocity than the bank accounts of poor people. This makes it more scandalous, not less. People who didn't need the money took ten times as much, because they could, and now they are pointing accusing fingers at the little people. Again.