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OK so putting the sarcasm aside can anyone with a bit of know how on monetary policy actually explain why all the media keeps pointing at Covid and fertilizers

OK so putting the sarcasm aside can anyone with a bit of know how on monetary policy actually explain why all the media keeps pointing at Covid and fertilizers and Ukranian war rather than the QE since 2008? Is this central banks diverting attention or is the parent comment overly simplifying this?

pm90 4y ago
Would we have had a recession without Covid or the War? It seems pretty unlikely from what we know. Covid wrecked supply chains and the War wrecked energy + food prices. So the Fed has to step in to try and clamp on demand rather than letting the world economy grow organically to meet it.
- cronix 4y ago
  Covid wrecked no supply chains. The overblown human reaction to it did. Oil prices were on the rise well before the Ukraine invasion.
- NickC25 4y ago
  I have a feeling that the answer is yes - because economics is kind of cyclical. We can't have a boom without the inevitable bust, so to speak. Plus, keeping interest rates unrealistically low for over a decade just to please the highest echelons of financial power (under the bullshit guise that lower interest rates == more jobs) does nothing more than pause the natural economic cycle and, honestly, it just makes the bust that much more inevitable and dangerous.
comte7092 4y ago
Your hunch is correct. The constant cry of “money printing!!!!” Is an oversimplification. It’s not totally wrong mind you, but as we all know, prices are set by supply and demand. An obvious example that I think a lot of people can easily connect with is the fact that globalization has been deflationary (it’s driven prices down), and that isn’t a monetary phenomenon. As someone sympathetic to MMT, the solution in my opinion has less to do with the fed, Congress needs to tighten fiscal policy.
SpicyLemonZest 4y ago
Most people in monetary policy circles (and virtually everyone with a role in setting monetary policy) think of the money supply as a parameter that can be adjusted pretty freely rather than a fixed resource you need to be careful with. To them, pointing to the money supply as a cause of inflation is like pointing to the water supply as a cause of why your house is flooded. It's not false, but it doesn't mean that you should eliminate your flood risk by tearing the pipes out of your walls and satisfying all your water needs with buckets from the local well.
- NickC25 4y ago
  Unfortunately there's a political element to it (because the Fed is not actually independent in the truest sense - they have to walk political tightropes just like every other official in Washington) and that's where things get messy. The problem is - how do you improve this system while taking into consideration the real-world effects of Fed policy?
t-3 4y ago
Acknowledging one of these is much more politically palatable to the elites than the other. If the economy suffers a bit, well that's just because we cut off a world-leading supplier of fuels, food, and industrially-important metals, not because we've been fucking over the rest of you for own profit over and over and over again. Reality is, both are true to greater and lesser extents depending on who and where you are. Economy is complex, the global geopolitical situation is undergoing a major shift, probably nothing will be clear without 100 years of hindsight.
- delusional 4y ago
  I find anything that blames some "elite" and implies a direct or indirect relationship between such an "elite" and the media extremely hard to believe. It seems unlikely to me that some conspiracy of journalists and CEO's came together to shape the entire political system.
  - germinalphrase 4y ago
    It’s not a conspiracy if it’s business as usual. The people in charge just hire folks that share their views, fire those that go off message, and provide editorial guidance to those who are receptive. It’s not even a criticism specific to media. Most large organizations work this way to some degree.
    - delusional 4y ago
      This sounds incredibly cynical to me. It seems desirable to me that a newspaper has some authorial cohesion. That the audience of readers has some identifying viewpoint and person that they can comprehend. So editorial guidance in that sense seems positive. I guess I can imagine how such a editorial process could create a monoculture (although I don't think it has to), but that's where multiple newspapers become useful. While one newspaper may have some editorial angle, different newspapers have different editorial staff. Journalists also seem to me to be rather principled people. If their editors were systematically suppressing certain stories and angles, I'd expect them to start a new newspaper, especially considering how easy it is to get started nowadays, and report on that. With all these considerations I don't see what system would keep these stories back. Editorial staff can maybe control a single newspaper, but they can't control the other media. Even if they could, they wouldn't be able to control journalists that may become disillusioned by such a system.
matrix_overload 4y ago
aschearer 4y ago
Well, 2008 was 14 years ago. If QE was "the cause" then why did it take so long to have its effect? Whatever the reason, why isn't that thing "the cause"? It's a bit like an unhealthy person dying from a heart attack. What's the cause of death: the heart attack or decades of unhealthy habits? And if the later, which habits and how should the person have changed? Even then, something is missing if the explanation omits the heart attack itself.
marcosdumay 4y ago
As a rule "all the media" never has any idea what they are talking about. It is easy to verify that on the subjects that you know. It doesn't go away on the other ones. I have never seen central banks trying to divert attention. That something that politicians do, and central banks communications tend to be done by technical people (not by their heads). I have seen plenty of head of governments trying to divert attention from some economical fact, but the lack of understanding of fundamental things, like cause and effect, monetary identities, and the difference between monetary and real indicators are always there and don't seem to be planted by any PR team.

pm90 4y ago

Would we have had a recession without Covid or the War? It seems pretty unlikely from what we know. Covid wrecked supply chains and the War wrecked energy + food prices. So the Fed has to step in to try and clamp on demand rather than letting the world economy grow organically to meet it.

cronix 4y ago
Covid wrecked no supply chains. The overblown human reaction to it did. Oil prices were on the rise well before the Ukraine invasion.
NickC25 4y ago
I have a feeling that the answer is yes - because economics is kind of cyclical. We can't have a boom without the inevitable bust, so to speak. Plus, keeping interest rates unrealistically low for over a decade just to please the highest echelons of financial power (under the bullshit guise that lower interest rates == more jobs) does nothing more than pause the natural economic cycle and, honestly, it just makes the bust that much more inevitable and dangerous.

comte7092 4y ago

Your hunch is correct. The constant cry of “money printing!!!!” Is an oversimplification. It’s not totally wrong mind you, but as we all know, prices are set by supply and demand. An obvious example that I think a lot of people can easily connect with is the fact that globalization has been deflationary (it’s driven prices down), and that isn’t a monetary phenomenon. As someone sympathetic to MMT, the solution in my opinion has less to do with the fed, Congress needs to tighten fiscal policy.

SpicyLemonZest 4y ago

Most people in monetary policy circles (and virtually everyone with a role in setting monetary policy) think of the money supply as a parameter that can be adjusted pretty freely rather than a fixed resource you need to be careful with. To them, pointing to the money supply as a cause of inflation is like pointing to the water supply as a cause of why your house is flooded. It's not false, but it doesn't mean that you should eliminate your flood risk by tearing the pipes out of your walls and satisfying all your water needs with buckets from the local well.

NickC25 4y ago
Unfortunately there's a political element to it (because the Fed is not actually independent in the truest sense - they have to walk political tightropes just like every other official in Washington) and that's where things get messy. The problem is - how do you improve this system while taking into consideration the real-world effects of Fed policy?

t-3 4y ago

Acknowledging one of these is much more politically palatable to the elites than the other. If the economy suffers a bit, well that's just because we cut off a world-leading supplier of fuels, food, and industrially-important metals, not because we've been fucking over the rest of you for own profit over and over and over again. Reality is, both are true to greater and lesser extents depending on who and where you are. Economy is complex, the global geopolitical situation is undergoing a major shift, probably nothing will be clear without 100 years of hindsight.

delusional 4y ago
I find anything that blames some "elite" and implies a direct or indirect relationship between such an "elite" and the media extremely hard to believe. It seems unlikely to me that some conspiracy of journalists and CEO's came together to shape the entire political system.
- germinalphrase 4y ago
  It’s not a conspiracy if it’s business as usual. The people in charge just hire folks that share their views, fire those that go off message, and provide editorial guidance to those who are receptive. It’s not even a criticism specific to media. Most large organizations work this way to some degree.
  - delusional 4y ago
    This sounds incredibly cynical to me. It seems desirable to me that a newspaper has some authorial cohesion. That the audience of readers has some identifying viewpoint and person that they can comprehend. So editorial guidance in that sense seems positive. I guess I can imagine how such a editorial process could create a monoculture (although I don't think it has to), but that's where multiple newspapers become useful. While one newspaper may have some editorial angle, different newspapers have different editorial staff. Journalists also seem to me to be rather principled people. If their editors were systematically suppressing certain stories and angles, I'd expect them to start a new newspaper, especially considering how easy it is to get started nowadays, and report on that. With all these considerations I don't see what system would keep these stories back. Editorial staff can maybe control a single newspaper, but they can't control the other media. Even if they could, they wouldn't be able to control journalists that may become disillusioned by such a system.

matrix_overload 4y ago

aschearer 4y ago

Well, 2008 was 14 years ago. If QE was "the cause" then why did it take so long to have its effect? Whatever the reason, why isn't that thing "the cause"? It's a bit like an unhealthy person dying from a heart attack. What's the cause of death: the heart attack or decades of unhealthy habits? And if the later, which habits and how should the person have changed? Even then, something is missing if the explanation omits the heart attack itself.

marcosdumay 4y ago

As a rule "all the media" never has any idea what they are talking about. It is easy to verify that on the subjects that you know. It doesn't go away on the other ones. I have never seen central banks trying to divert attention. That something that politicians do, and central banks communications tend to be done by technical people (not by their heads). I have seen plenty of head of governments trying to divert attention from some economical fact, but the lack of understanding of fundamental things, like cause and effect, monetary identities, and the difference between monetary and real indicators are always there and don't seem to be planted by any PR team.