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I’m seeing this narrative pushed a lot by politicians who would like to shift the blame to anyone other than themselves.

refurb 4y ago
Pretty much. They don’t want to admit their own spending policies and pressure to expand the money supply is the cause. And the best part is when they tell employers to not raise wages because it makes inflation worse.
- RC_ITR 4y ago
  So your argument is there is just a really long lag? Because money is relatively tight again and we are still seeing inflation. OR are there other factors potentially at play?
  - refurb 4y ago
    Of course other factors are at play. Money supply is the kindling, but other factors can be be the spark that starts the fire. In 2008 the massive expansion of the money supply did little to spur inflation because: a) banks were skittish and increased their reserves significantly which tied up extra money and b) consumers worked to pay down debt and increase savings. I don’t deny that supply shocks can trigger inflation, but without excess money supply the effect is limited.
    - RC_ITR 4y ago
      > I don’t deny that supply shocks can trigger inflation, but without excess money supply the effect is limited. Since 1970, only supply shocks have caused inflation so idk why you’re so confident that it wasn’t the case this time. Volker doing what he did while oil prices tanked really fucked with the economic understanding of a whole generation of people. Like, you’re literally saying “hey, the occurrence of X in 2008 doesn't count, and when we did X again in 2020 with Y that’s when X really mattered, but yeah Y is marginal. Also ignore that when Y happened without X in the 70s it happened too.”
RC_ITR 4y ago
Well, when the truth is “blame consumers for consuming a record amount of stuff with no price sensitivity after being forced indoors for two years, where they learned life is meant to be lived,” I can see why they don’t want to take the fall for that.
- sokoloff 4y ago
  The amount of “forced indoors for two years” that the virus was responsible for was not 100% and the amount that politicians were responsible for was not 0%.
  - RC_ITR 4y ago
    I mean, my fellow citizen, the way to curb inflation is to consume less and have a higher price sensitivity. I'm glad you're signing up to do so, because it's unclear to me that stimulus checks are still the reason that consumption is at an ATH and inflation is elevated. And you can't really blame loose money either...
    - sokoloff 4y ago
      Indeed, curbing demand when demand is out of whack with supply is the inherent mechanism by which bouts of inflation eventually stop. I’m doing what I can (naturally via price-sensitivity, not out of any sense of collectivism). Specifically, we’re delaying the replacement of a 225K mile 2005 CR-V for a few more years and making a lot more meals at home rather than eating out.

refurb 4y ago

Pretty much. They don’t want to admit their own spending policies and pressure to expand the money supply is the cause. And the best part is when they tell employers to not raise wages because it makes inflation worse.

RC_ITR 4y ago
So your argument is there is just a really long lag? Because money is relatively tight again and we are still seeing inflation. OR are there other factors potentially at play?
- refurb 4y ago
  Of course other factors are at play. Money supply is the kindling, but other factors can be be the spark that starts the fire. In 2008 the massive expansion of the money supply did little to spur inflation because: a) banks were skittish and increased their reserves significantly which tied up extra money and b) consumers worked to pay down debt and increase savings. I don’t deny that supply shocks can trigger inflation, but without excess money supply the effect is limited.
  - RC_ITR 4y ago
    > I don’t deny that supply shocks can trigger inflation, but without excess money supply the effect is limited. Since 1970, only supply shocks have caused inflation so idk why you’re so confident that it wasn’t the case this time. Volker doing what he did while oil prices tanked really fucked with the economic understanding of a whole generation of people. Like, you’re literally saying “hey, the occurrence of X in 2008 doesn't count, and when we did X again in 2020 with Y that’s when X really mattered, but yeah Y is marginal. Also ignore that when Y happened without X in the 70s it happened too.”

RC_ITR 4y ago

Well, when the truth is “blame consumers for consuming a record amount of stuff with no price sensitivity after being forced indoors for two years, where they learned life is meant to be lived,” I can see why they don’t want to take the fall for that.

sokoloff 4y ago
The amount of “forced indoors for two years” that the virus was responsible for was not 100% and the amount that politicians were responsible for was not 0%.
- RC_ITR 4y ago
  I mean, my fellow citizen, the way to curb inflation is to consume less and have a higher price sensitivity. I'm glad you're signing up to do so, because it's unclear to me that stimulus checks are still the reason that consumption is at an ATH and inflation is elevated. And you can't really blame loose money either...
  - sokoloff 4y ago
    Indeed, curbing demand when demand is out of whack with supply is the inherent mechanism by which bouts of inflation eventually stop. I’m doing what I can (naturally via price-sensitivity, not out of any sense of collectivism). Specifically, we’re delaying the replacement of a 225K mile 2005 CR-V for a few more years and making a lot more meals at home rather than eating out.