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I'm not convinced that the drop in interest rates at the start of the pandemic was necessary or wise. The economic contraction was due to governments instructin

I'm not convinced that the drop in interest rates at the start of the pandemic was necessary or wise. The economic contraction was due to governments instructing people to shut their businesses down and simply lifting those was all that was necessary to revive the economy. It wasn't a recession situation where consumer spending needed to be stimulated.

acchow 4y ago
They wanted to induce more spending elsewhere in the economy to make up for the lack of spending in shut down businesses. I think as businesses reopened gradually they should obviously have done the reverse (Quantitative tightening), but they didn’t. And then we ended up with high inflation.
houston_Euler 4y ago
I don't know, I think a lot of people changed their behaviors to avoid the virus, whether or not businesses were open. Check how quickly and how far Personal Consumption Expenditures dropped: https://fred.stlouisfed.org/series/PCE https://fred.stlouisfed.org/series/PCE
readthenotes1 4y ago
Certainly not with the corporate bond buying program they threw in to guarantee there was enough dollars in the market...
nostromo 4y ago
The biggest problem wasn’t the interest rate, it was the money printing to gobble up mortgages and bonds. Problem: Covid Solution: $1.5 trillion invested in mortgages! If you don’t own a house and wonder why they’re unaffordable, this is why: https://fred.stlouisfed.org/series/WSHOMCB https://fred.stlouisfed.org/series/WSHOMCB
- spaceman_2020 4y ago
  It’s also why inflation has been so stubborn. Anyone who owned ANY assets practically doubled their net worth within 2 years. If you owned a house, you likely also refinanced for under 3%. At the same time, wages increased. How can there be a drop in demand if your house is now worth 50-100%, your 401k is 50% higher, and your wages are 20% higher? Sure, this doesn’t describe everyone - the bottom 50%ile might not own any assets at all. But it does describe enough Americans that demand can’t crater anytime soon.
  - acchow 4y ago
    It was a massive handout to existing homeowners. If you rent, you got nothing. If you were paying $6000/mth on your mortgage, you could refinance and find yourself paying $3500/mth. Now, until the end of the loan, you find you have an extra $2500/mth extra to spend. No wonder we have inflation
    - paulmd 4y ago
      > If you rent, you got nothing in many states rentoids could stop paying their rent and just pocket it, with evictions halted for >12 months. there was something for everyone this time around
      - acchow 4y ago
        Ok, renters got $1500/mth for 2 years, maybe, if they decided not to pay rent (almost all my friends are renters and none of them stopped paying rent). Homeowners got $1500/mth for 30 years.
    - spaceman_2020 4y ago
      It was pretty much a "screw you" to young people. Home ownership rates for 65+ year olds is nearly 80%. For 45-54 year olds, its 70%. Statistically, if you were 45 years old, you likely benefited a great deal from the pandemic. My brother is in that age group. He bought his house for 380k. It's now valued at 750k. He works in tech so his salary increased from 120k to 180k. He refinanced his mortgage at 2.5% and pays iirc ~1100/month. It's the same story for all of his friends.
- triceratops 4y ago
  > biggest problem wasn’t the interest rate Err...how do you think people get massive mortgages, if not low interest rates?
stephen_g 4y ago
Dropping rates doesn't really affect spending that much (but can contribute to increasing asset prices, like houses and stocks). The whole thing is basically a cargo-cult kind of thing at this point. Need to stimulate? Drop rates. Inflation too high? Raise rates. But the theory doesn't actually match the real world, and it never actually does any good. At this point, they'll keep raising rates either until some unrelated factor happens to moderate inflation, or their rate-raising unnecessarily causes a crash and big recession (which will reduce inflation, but really not in a good way).
- pas 4y ago
  macroeconomics is complex, but at least this part is not that complex. in monetary policy there's one lever, the money supply expansion rate. as long as there's a sufficiently large part of the economy infused with debt (banks rolling over short term debts, large companies using credit to fund payroll, any new investment compared to "risk free rate" of central banks, etc) the lever has some effect. of course it's a blunt instrument. fiscal policy is needed to pick up the slack. but that's mostly bludgeoned to death long ago by polarization of politics.
- alfiedotwtf 4y ago
  > Dropping rates doesn't really affect spending that much Have that conversation with people who aren't on tech salaries. Each rate rise brings more cuts to the weekly budget.
- sokoloff 4y ago
  If rates don’t affect spending, what’s the mechanism by which raising them will “unnecessarily [cause] a crash and a big recession”?
- nly 4y ago
  In the UK a large % of take home pay goes to mortgages that are running on fixed rate, short term contracts. Raising rates definitely has a cooling effect
- shagie 4y ago
  Jaw-Dropping Stats About the State of Debt in America - https://www.yahoo.com/video/jaw-dropping-stats-state-credit-130022967.html https://www.yahoo.com/video/jaw-dropping-stats-state-credit-... > A recent GOBankingRates survey found that 30% of Americans have between $1,001 and $5,000 in credit card debt, 15% have $5,001 or more in credit card debt and about 6% have more than $10,000 in credit card debt. Although 6% may seem like a small amount, that means that based on the survey results, 14 million Americans have over $10,000 of credit card debt. The change to the rates increases the amount of interest paid on holding credit card debt. That directly does impact spending for a significant portion of the population. --- The awkward part is that the fed's tools for managing the economy are rather blunt and take time to cause a change. Monetary policy vs Fiscal policy. However, fiscal policy is tied to the gridlock in congress and so all the responsibility for managing the rate of inflation and jobs has been pushed onto the central bank... and this is what you get. Dropping rates and raising rates are the tools that they have until a majority of elected politicians want to take the responsibility for making a decision that impacts people's finances.
swhalen 4y ago
The suppression of government bond yields and money creation via quantitative easing were needed if states were to pay people's salaries during lockdowns. Governments would not have been able to raise that much money on the open market without central bank intervention.
Aunche 4y ago
Lowering interest rates wasn't to encourage consumer spending. It was to prevent businesses from going bankrupt. If you owned a perfectly sustainable business pre-pandemic that happened to owe debt, you'd be completely screwed when your revenue plunged during the pandemic. The only way to stay operational is to take on more debt, but that may not be possible if interest rates are too high. Lowering interest rates during a pandemic makes sense. What doesn't make sense is lowering interest rates when the economy was perfectly healthy in 2019.
- metaphor 4y ago
  > What doesn't make sense is lowering interest rates when the economy was perfectly healthy in 2019. Err, "perfectly healthy" may be a bit of a mischaracterization. Quoting from the July 2019 FOMC statement[1] (my emphasis): >> Although growth of household spending has picked up from earlier in the year, growth of business fixed investment has been soft. ...then the following September statement[2]: >> Although household spending has been rising at a strong pace, business fixed investment and exports have weakened. ...and still the following October statement[3]: >> Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. Look at the Fed Funds Effective Rate[4] circa 2019, then compare that to the Fed's balance sheet[5] around the same time. I understand that little ~$500 billion bump in the 6 months prior to the start of COVID is the Fed averting crisis in a bond market that was approaching dangerously close to the sort of illiquidity levels which get sovereign nations into a lot of trouble. I also understand that banks were supposed to be part of the machine that provide that liquidity, except regulations coming out of the Great Financial Crisis that imposed things like Liquidity Coverage Ratio and Supplementary Leverage Ratio requirements created an unintended incentive for banks to drop low-yield bonds from their now constrained balance sheets to optimize profits. So the flow of capital towards "business fixed investments" tightened, capital which originates in the form of loans from banks, and interest rates is a knob the Fed can tweak...or something like that. To be sure, I'm neither a banker nor an economist. Also worth noting that the S&P 500 went through a -18% correction starting the end of September 2018 and didn't recover until May 2019. [1] https://www.federalreserve.gov/newsevents/pressreleases/monetary20190731a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [2] https://www.federalreserve.gov/newsevents/pressreleases/monetary20190918a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [3] https://www.federalreserve.gov/newsevents/pressreleases/monetary20191030a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [4] https://fred.stlouisfed.org/series/DFF https://fred.stlouisfed.org/series/DFF [5] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
autoexec 4y ago
> The economic contraction was due to governments instructing people to shut their businesses down and simply lifting those was all that was necessary to revive the economy. Governments told people they couldn't go to work. Two thirds of the country live paycheck to paycheck. In order to keep food on the table and a roof over their heads many had to go deep into debt and/or eat into their savings which weren't always so great to start with since around 25% of Americans have no savings at all. Forcing a great number of people into huge amounts of debt and desperation was bound to slow spending long after the bars reopened, and to add to that you had many households where breadwinners were suddenly dead or unable to go back to work either due to illness or unexpected childcare expenses since schools weren't able to perform their role as babysitter while parents worked all day. Some financial support was (and still is) needed for families who suffered heavy economic losses because of the pandemic and the restrictions it necessitated. Consumer spending was doomed to suffer for a whole lot of Americans. Even after the restrictions were lifted it's pretty hard to stimulate consumer spending when people are trying to dig themselves out of a hole and avoid eviction. All of that was at least somewhat offset by the desperation of the wealthy to get back to spending on the goods and services they were denied while the nation was locked down though. People who were able to stay employed and had large sums of money in the bank throughout the pandemic were very quick to get back to spending. Unfortunately, most Americans didn't come out of the situation in such great shape. After all of the emotional trauma they were every bit as desperate for some familiar comforts and a return to normalcy but they were forced further into debt to get them.
- inspector-g 4y ago
  Then this leads me to wonder if interest rates are too coarse-grained for what would have helped folks the most. I don’t know what would have been a finer-grained approach, but universally lowering interest rates had a huge effect on other areas (like home purchases) which were not in dire straights like “keeping food on the table and a roof over their heads”
- boc 4y ago
  Totally agree. I think it's still worth reminding everyone that over a million Americans died from Covid-19 (and counting), and the response was way better than the response to the last major economic crisis. Overheating the economy vs starting a depression in the middle of a pandemic? I'll take the current course every time. Inflation isn't the end of the world, and benefits indebted actors (anybody with substantial fixed-rate debt).
deleted 4y ago
[deleted]
incomingpain 4y ago
Hindsight is 2020 as it were. But so is our response to covid. There's an article from a covidian calling for pandemic amensty because it was unreasonable for her to wear a mask in the forest or call for mass terminations of antivaxxers. Turns out the response to covid was completely unreasonable and we have some extremely severe consequences to deal with now. The people responsible for these severe consequences will need to be punished.
bitcoin_anon 4y ago
Let us not forget why we went from an elemental money (gold) to a money that is printable: price stability. We collectively decided that we wanted a few people to have control over the money supply so that they could turn the knobs to ensure price stability. During the pandemic, knobs were turned. They continue to be turned. Where's the price stability?
- paulmd 4y ago
  > During the pandemic, knobs were turned. They continue to be turned. Where's the price stability? well, it kinda turns out the market is so highly consolidated and inefficient (in a market sense) that a couple oligopolists control most markets, and they pretty much all colluded to increase margins at the same time. the only knob the fed really has to put a stop to that is to hurt the economy so badly that people can't afford to pay it.
  - paulmd 4y ago
    BTW, while that may seem doubtful on the face of it, consider this: a single baby formula plant shutting down precipitated a national crisis because one or two plants basically make the whole supply for the entire country. Most food markets and most dry-goods (even tech markets specifically) are not any less concentrated than that. Smithfield and Hormel basically run almost the entire meat market, they control a supermajority share (and not a "technical" one either, we're probably talking >90% share) of the entire US production between two companies. What would happen if both Intel and AMD decided to raise prices? Well, you'd pay more, maybe in the long term you'd see a push away to ARM or RISC-V but that's always been a pipe dream in practice, x86 domination of the desktop market has never been cracked. And oops, turns out ARM went bad just recently too, so, time to start over again, better luck next time suckas!
triceratops 4y ago
Agreed. The markets plunged so the Fed airdropped a ton of assistance to the 1%. I mean my portfolio went up, but I was also sitting on a lot of cash in anticipation of a prolonged market downturn. Clearly there's no reward for being financially responsible. Instead people hate on poor college grads getting $10k off their overpriced educations.
- s1artibartfast 4y ago
  I think it's fair to hate on both. The government should not be incentivizing irresponsible decisions in either case.
  - triceratops 4y ago
    I'm having a hard time hating that much on 18-year olds who were encouraged to borrow recklessly by their parents, college counselors, and other advisors to pursue an education. The amount of digital ink spilled on criticizing them seems to vastly outweigh how much hate the propping up of the market in March 2020 gets.
    - PKop 4y ago
      Obviously, but the only solution to this is someone has to suffer. Who is punished for all the bad ideas and bad advice you describe in your statement? Now they get bailed out, so what changes exactly? In this case, the colleges running the scam (charging astronomical prices for worthless paper credentials, and the administrators feeding at this trough) are the biggest winners. Even the counselors and advisors are part of this pipeline of moral hazard if you think about it. What is their purpose, and are they fulfilling it? Does bailing out their bad advice change anything?
      - triceratops 4y ago
        You're right, but this is exactly what I mean about pointless hate. Where's the anger about the other bailout - of the financial markets? Where are the lawsuits against that? Why isn't there any legislation in the works to cap the cost of college or reduce predatory lending to teenagers? Why not allow student debt to be dischargeable in bankruptcy so that it's priced correctly by the market?

acchow 4y ago

They wanted to induce more spending elsewhere in the economy to make up for the lack of spending in shut down businesses. I think as businesses reopened gradually they should obviously have done the reverse (Quantitative tightening), but they didn’t. And then we ended up with high inflation.

houston_Euler 4y ago

I don't know, I think a lot of people changed their behaviors to avoid the virus, whether or not businesses were open. Check how quickly and how far Personal Consumption Expenditures dropped: https://fred.stlouisfed.org/series/PCE https://fred.stlouisfed.org/series/PCE

readthenotes1 4y ago

Certainly not with the corporate bond buying program they threw in to guarantee there was enough dollars in the market...

nostromo 4y ago

The biggest problem wasn’t the interest rate, it was the money printing to gobble up mortgages and bonds. Problem: Covid Solution: $1.5 trillion invested in mortgages! If you don’t own a house and wonder why they’re unaffordable, this is why: https://fred.stlouisfed.org/series/WSHOMCB https://fred.stlouisfed.org/series/WSHOMCB

spaceman_2020 4y ago
It’s also why inflation has been so stubborn. Anyone who owned ANY assets practically doubled their net worth within 2 years. If you owned a house, you likely also refinanced for under 3%. At the same time, wages increased. How can there be a drop in demand if your house is now worth 50-100%, your 401k is 50% higher, and your wages are 20% higher? Sure, this doesn’t describe everyone - the bottom 50%ile might not own any assets at all. But it does describe enough Americans that demand can’t crater anytime soon.
- acchow 4y ago
  It was a massive handout to existing homeowners. If you rent, you got nothing. If you were paying $6000/mth on your mortgage, you could refinance and find yourself paying $3500/mth. Now, until the end of the loan, you find you have an extra $2500/mth extra to spend. No wonder we have inflation
  - paulmd 4y ago
    > If you rent, you got nothing in many states rentoids could stop paying their rent and just pocket it, with evictions halted for >12 months. there was something for everyone this time around
    - acchow 4y ago
      Ok, renters got $1500/mth for 2 years, maybe, if they decided not to pay rent (almost all my friends are renters and none of them stopped paying rent). Homeowners got $1500/mth for 30 years.
  - spaceman_2020 4y ago
    It was pretty much a "screw you" to young people. Home ownership rates for 65+ year olds is nearly 80%. For 45-54 year olds, its 70%. Statistically, if you were 45 years old, you likely benefited a great deal from the pandemic. My brother is in that age group. He bought his house for 380k. It's now valued at 750k. He works in tech so his salary increased from 120k to 180k. He refinanced his mortgage at 2.5% and pays iirc ~1100/month. It's the same story for all of his friends.
triceratops 4y ago
> biggest problem wasn’t the interest rate Err...how do you think people get massive mortgages, if not low interest rates?

stephen_g 4y ago

Dropping rates doesn't really affect spending that much (but can contribute to increasing asset prices, like houses and stocks). The whole thing is basically a cargo-cult kind of thing at this point. Need to stimulate? Drop rates. Inflation too high? Raise rates. But the theory doesn't actually match the real world, and it never actually does any good. At this point, they'll keep raising rates either until some unrelated factor happens to moderate inflation, or their rate-raising unnecessarily causes a crash and big recession (which will reduce inflation, but really not in a good way).

pas 4y ago
macroeconomics is complex, but at least this part is not that complex. in monetary policy there's one lever, the money supply expansion rate. as long as there's a sufficiently large part of the economy infused with debt (banks rolling over short term debts, large companies using credit to fund payroll, any new investment compared to "risk free rate" of central banks, etc) the lever has some effect. of course it's a blunt instrument. fiscal policy is needed to pick up the slack. but that's mostly bludgeoned to death long ago by polarization of politics.
alfiedotwtf 4y ago
> Dropping rates doesn't really affect spending that much Have that conversation with people who aren't on tech salaries. Each rate rise brings more cuts to the weekly budget.
sokoloff 4y ago
If rates don’t affect spending, what’s the mechanism by which raising them will “unnecessarily [cause] a crash and a big recession”?
nly 4y ago
In the UK a large % of take home pay goes to mortgages that are running on fixed rate, short term contracts. Raising rates definitely has a cooling effect
shagie 4y ago
Jaw-Dropping Stats About the State of Debt in America - https://www.yahoo.com/video/jaw-dropping-stats-state-credit-130022967.html https://www.yahoo.com/video/jaw-dropping-stats-state-credit-... > A recent GOBankingRates survey found that 30% of Americans have between $1,001 and $5,000 in credit card debt, 15% have $5,001 or more in credit card debt and about 6% have more than $10,000 in credit card debt. Although 6% may seem like a small amount, that means that based on the survey results, 14 million Americans have over $10,000 of credit card debt. The change to the rates increases the amount of interest paid on holding credit card debt. That directly does impact spending for a significant portion of the population. --- The awkward part is that the fed's tools for managing the economy are rather blunt and take time to cause a change. Monetary policy vs Fiscal policy. However, fiscal policy is tied to the gridlock in congress and so all the responsibility for managing the rate of inflation and jobs has been pushed onto the central bank... and this is what you get. Dropping rates and raising rates are the tools that they have until a majority of elected politicians want to take the responsibility for making a decision that impacts people's finances.

swhalen 4y ago

The suppression of government bond yields and money creation via quantitative easing were needed if states were to pay people's salaries during lockdowns. Governments would not have been able to raise that much money on the open market without central bank intervention.

Aunche 4y ago

Lowering interest rates wasn't to encourage consumer spending. It was to prevent businesses from going bankrupt. If you owned a perfectly sustainable business pre-pandemic that happened to owe debt, you'd be completely screwed when your revenue plunged during the pandemic. The only way to stay operational is to take on more debt, but that may not be possible if interest rates are too high. Lowering interest rates during a pandemic makes sense. What doesn't make sense is lowering interest rates when the economy was perfectly healthy in 2019.

metaphor 4y ago
> What doesn't make sense is lowering interest rates when the economy was perfectly healthy in 2019. Err, "perfectly healthy" may be a bit of a mischaracterization. Quoting from the July 2019 FOMC statement[1] (my emphasis): >> Although growth of household spending has picked up from earlier in the year, growth of business fixed investment has been soft. ...then the following September statement[2]: >> Although household spending has been rising at a strong pace, business fixed investment and exports have weakened. ...and still the following October statement[3]: >> Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. Look at the Fed Funds Effective Rate[4] circa 2019, then compare that to the Fed's balance sheet[5] around the same time. I understand that little ~$500 billion bump in the 6 months prior to the start of COVID is the Fed averting crisis in a bond market that was approaching dangerously close to the sort of illiquidity levels which get sovereign nations into a lot of trouble. I also understand that banks were supposed to be part of the machine that provide that liquidity, except regulations coming out of the Great Financial Crisis that imposed things like Liquidity Coverage Ratio and Supplementary Leverage Ratio requirements created an unintended incentive for banks to drop low-yield bonds from their now constrained balance sheets to optimize profits. So the flow of capital towards "business fixed investments" tightened, capital which originates in the form of loans from banks, and interest rates is a knob the Fed can tweak...or something like that. To be sure, I'm neither a banker nor an economist. Also worth noting that the S&P 500 went through a -18% correction starting the end of September 2018 and didn't recover until May 2019. [1] https://www.federalreserve.gov/newsevents/pressreleases/monetary20190731a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [2] https://www.federalreserve.gov/newsevents/pressreleases/monetary20190918a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [3] https://www.federalreserve.gov/newsevents/pressreleases/monetary20191030a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... [4] https://fred.stlouisfed.org/series/DFF https://fred.stlouisfed.org/series/DFF [5] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...

autoexec 4y ago

> The economic contraction was due to governments instructing people to shut their businesses down and simply lifting those was all that was necessary to revive the economy. Governments told people they couldn't go to work. Two thirds of the country live paycheck to paycheck. In order to keep food on the table and a roof over their heads many had to go deep into debt and/or eat into their savings which weren't always so great to start with since around 25% of Americans have no savings at all. Forcing a great number of people into huge amounts of debt and desperation was bound to slow spending long after the bars reopened, and to add to that you had many households where breadwinners were suddenly dead or unable to go back to work either due to illness or unexpected childcare expenses since schools weren't able to perform their role as babysitter while parents worked all day. Some financial support was (and still is) needed for families who suffered heavy economic losses because of the pandemic and the restrictions it necessitated. Consumer spending was doomed to suffer for a whole lot of Americans. Even after the restrictions were lifted it's pretty hard to stimulate consumer spending when people are trying to dig themselves out of a hole and avoid eviction. All of that was at least somewhat offset by the desperation of the wealthy to get back to spending on the goods and services they were denied while the nation was locked down though. People who were able to stay employed and had large sums of money in the bank throughout the pandemic were very quick to get back to spending. Unfortunately, most Americans didn't come out of the situation in such great shape. After all of the emotional trauma they were every bit as desperate for some familiar comforts and a return to normalcy but they were forced further into debt to get them.

inspector-g 4y ago
Then this leads me to wonder if interest rates are too coarse-grained for what would have helped folks the most. I don’t know what would have been a finer-grained approach, but universally lowering interest rates had a huge effect on other areas (like home purchases) which were not in dire straights like “keeping food on the table and a roof over their heads”
boc 4y ago
Totally agree. I think it's still worth reminding everyone that over a million Americans died from Covid-19 (and counting), and the response was way better than the response to the last major economic crisis. Overheating the economy vs starting a depression in the middle of a pandemic? I'll take the current course every time. Inflation isn't the end of the world, and benefits indebted actors (anybody with substantial fixed-rate debt).

deleted 4y ago

[deleted]

incomingpain 4y ago

Hindsight is 2020 as it were. But so is our response to covid. There's an article from a covidian calling for pandemic amensty because it was unreasonable for her to wear a mask in the forest or call for mass terminations of antivaxxers. Turns out the response to covid was completely unreasonable and we have some extremely severe consequences to deal with now. The people responsible for these severe consequences will need to be punished.

bitcoin_anon 4y ago

Let us not forget why we went from an elemental money (gold) to a money that is printable: price stability. We collectively decided that we wanted a few people to have control over the money supply so that they could turn the knobs to ensure price stability. During the pandemic, knobs were turned. They continue to be turned. Where's the price stability?

paulmd 4y ago
> During the pandemic, knobs were turned. They continue to be turned. Where's the price stability? well, it kinda turns out the market is so highly consolidated and inefficient (in a market sense) that a couple oligopolists control most markets, and they pretty much all colluded to increase margins at the same time. the only knob the fed really has to put a stop to that is to hurt the economy so badly that people can't afford to pay it.
- paulmd 4y ago
  BTW, while that may seem doubtful on the face of it, consider this: a single baby formula plant shutting down precipitated a national crisis because one or two plants basically make the whole supply for the entire country. Most food markets and most dry-goods (even tech markets specifically) are not any less concentrated than that. Smithfield and Hormel basically run almost the entire meat market, they control a supermajority share (and not a "technical" one either, we're probably talking >90% share) of the entire US production between two companies. What would happen if both Intel and AMD decided to raise prices? Well, you'd pay more, maybe in the long term you'd see a push away to ARM or RISC-V but that's always been a pipe dream in practice, x86 domination of the desktop market has never been cracked. And oops, turns out ARM went bad just recently too, so, time to start over again, better luck next time suckas!

triceratops 4y ago

Agreed. The markets plunged so the Fed airdropped a ton of assistance to the 1%. I mean my portfolio went up, but I was also sitting on a lot of cash in anticipation of a prolonged market downturn. Clearly there's no reward for being financially responsible. Instead people hate on poor college grads getting $10k off their overpriced educations.

s1artibartfast 4y ago
I think it's fair to hate on both. The government should not be incentivizing irresponsible decisions in either case.
- triceratops 4y ago
  I'm having a hard time hating that much on 18-year olds who were encouraged to borrow recklessly by their parents, college counselors, and other advisors to pursue an education. The amount of digital ink spilled on criticizing them seems to vastly outweigh how much hate the propping up of the market in March 2020 gets.
  - PKop 4y ago
    Obviously, but the only solution to this is someone has to suffer. Who is punished for all the bad ideas and bad advice you describe in your statement? Now they get bailed out, so what changes exactly? In this case, the colleges running the scam (charging astronomical prices for worthless paper credentials, and the administrators feeding at this trough) are the biggest winners. Even the counselors and advisors are part of this pipeline of moral hazard if you think about it. What is their purpose, and are they fulfilling it? Does bailing out their bad advice change anything?
    - triceratops 4y ago
      You're right, but this is exactly what I mean about pointless hate. Where's the anger about the other bailout - of the financial markets? Where are the lawsuits against that? Why isn't there any legislation in the works to cap the cost of college or reduce predatory lending to teenagers? Why not allow student debt to be dischargeable in bankruptcy so that it's priced correctly by the market?