4 ms·

You must be underestimating the negative effect high long-term inflation has on a society. Labor doesn’t gain leverage, it loses a lot of buying power.

by deburo 4y ago

socialismisok 4y ago
Not at all. I'm saying we have many levers to control inflation, worker power is only one.
- ShredKazoo 4y ago
  What levers would you use? In the article Powell says: >"I wish there were a painless way to do that," Powell said. "There isn't." Maybe you should email him your idea. Also, I don't think it is accurate to say that the Fed sees worker power as a "lever" to control inflation. Their "lever" is interest rates. The problem is that hiking rates has the unintended side effect of increasing unemployment, in addition to fighting inflation. And this unemployment increase is due to a generalized economic slowdown, which hurts both labor and capital -- that's why the stock market is falling. Recommended: https://www.amazon.com/Cartoon-Introduction-Economics-Two-Macroeconomics/dp/0809033615/ https://www.amazon.com/Cartoon-Introduction-Economics-Two-Ma...
  - socialismisok 4y ago
    Despite your patronizing post, I'm going to give this a response. We could attack the issue from the supply side - invest in production where there are bottlenecks (increasing supply of desirable goods), removing the profit motive by nationalizing some industries (for instance we could nationalize portions of the energy sector or transportation sector.) Alternatively, we could use tight price controls on industrial inputs. This, in turn, would result in a slightly less efficient market, but a reduced inflation. In fact, some have suggested that this inflation is not particularly demand side driven. Read this: https://www.frbsf.org/economic-research/publications/economic-letter/2022/june/how-much-do-supply-and-demand-drive-inflation/?amp=1 https://www.frbsf.org/economic-research/publications/economi... You'll also note that they 3 are obvious supply side problems associated with the current inflation - the war in Ukraine, COVID, to name some big ones. Maybe you'd like a resource that looks longer term. Wage growth has not been a significant driver of the current inflation: https://www.epi.org/blog/wage-growth-has-been-dampening-inflation-all-along-and-has-slowed-even-more-recently/ https://www.epi.org/blog/wage-growth-has-been-dampening-infl... Don't assume that someone who disagrees with your position is uneducated or less knowledgeable than you. I might not agree with you on economic policy (I'm sure you'll tell me nationalization is crazy talk) but just because we value different things is no reason to be patronizing.
- proffeatur8 4y ago

You must be underestimating the negative effect high long-term inflation has on a society. Labor doesn’t gain leverage, it loses a lot of buying power.

by deburo 4y ago

You must be underestimating the negative effect high long-term inflation has on a society. Labor doesn’t gain leverage, it loses a lot of buying power.

socialismisok 4y ago

Not at all. I'm saying we have many levers to control inflation, worker power is only one.

ShredKazoo 4y ago
What levers would you use? In the article Powell says: >"I wish there were a painless way to do that," Powell said. "There isn't." Maybe you should email him your idea. Also, I don't think it is accurate to say that the Fed sees worker power as a "lever" to control inflation. Their "lever" is interest rates. The problem is that hiking rates has the unintended side effect of increasing unemployment, in addition to fighting inflation. And this unemployment increase is due to a generalized economic slowdown, which hurts both labor and capital -- that's why the stock market is falling. Recommended: https://www.amazon.com/Cartoon-Introduction-Economics-Two-Macroeconomics/dp/0809033615/ https://www.amazon.com/Cartoon-Introduction-Economics-Two-Ma...
- socialismisok 4y ago
  Despite your patronizing post, I'm going to give this a response. We could attack the issue from the supply side - invest in production where there are bottlenecks (increasing supply of desirable goods), removing the profit motive by nationalizing some industries (for instance we could nationalize portions of the energy sector or transportation sector.) Alternatively, we could use tight price controls on industrial inputs. This, in turn, would result in a slightly less efficient market, but a reduced inflation. In fact, some have suggested that this inflation is not particularly demand side driven. Read this: https://www.frbsf.org/economic-research/publications/economic-letter/2022/june/how-much-do-supply-and-demand-drive-inflation/?amp=1 https://www.frbsf.org/economic-research/publications/economi... You'll also note that they 3 are obvious supply side problems associated with the current inflation - the war in Ukraine, COVID, to name some big ones. Maybe you'd like a resource that looks longer term. Wage growth has not been a significant driver of the current inflation: https://www.epi.org/blog/wage-growth-has-been-dampening-inflation-all-along-and-has-slowed-even-more-recently/ https://www.epi.org/blog/wage-growth-has-been-dampening-infl... Don't assume that someone who disagrees with your position is uneducated or less knowledgeable than you. I might not agree with you on economic policy (I'm sure you'll tell me nationalization is crazy talk) but just because we value different things is no reason to be patronizing.
proffeatur8 4y ago