5 ms·

A useful test — which shows this isn't true — is to compare similar goods/services that have dissimilar amounts of regulation. For example — healthcare is heav

A useful test — which shows this isn't true — is to compare similar goods/services that have dissimilar amounts of regulation. For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.

gjsman-1000 4y ago
> For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. You forget indirect regulation. Veterinary drugs, veterinary education, and similar are quite regulated and expensive. So much so, that the average cost of vet school for in-state residents is over $200,000. Out-of-state, make it closer to $300K. The average cost of acquiring FDA approval of a new animal drug is $100 million and takes seven years. If you call that "lightly regulated" I don't know what "heavy regulation" is. So, to be honest, I don't believe your comparison is accurate. EDIT: This does depend on the estimate used (my first one was from https://www.veterinarypracticenews.com/efficacy-vs-cost/ https://www.veterinarypracticenews.com/efficacy-vs-cost/). Others say it is closer to $30 million for livestock and 9 years, but costs crossed $62 million in some cases (https://ahi.org/approval-and-regulation-of-animal-medicines/ https://ahi.org/approval-and-regulation-of-animal-medicines/). It seems to depend on how broadly "animal" is defined and the type of drug in question, but it's all under FDA purview. Regardless of how it is defined, it doesn't fall in my view as being nearly as "lightly regulated" as implied.
- AlexandrB 4y ago
  I think this is completely irrelevant given the much more pertinent example given: > Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.
  - Nacraile 4y ago
    I don't think you can reasonably claim that the market for houses above 750K-1M is independent of the market for houses below.....
    - deleted 4y ago
      [deleted]
    - AlexandrB 4y ago
      Maybe, but what's the mechanism for government guarantees below a certain range increasing demand above that range? Someone who can only qualify for a mortgage because it's guaranteed by the government isn't going to be able to make the jump into a non-guaranteed mortgage easily.
dcolkitt 4y ago
Veterinary spending has increased (as a result of higher disposable incomes leading to higher consumption), but it's not true that the cost of veterinary healthcare has increased. > The researchers track a “basket” of the most commonly-utilized procedures to see how the typical veterinary visit has changed in price over time. According to their research, these ordinary expenses declined by 6 percent from January 2009 to December 2017 after adjusting for inflation. [1]https://catalyst.independent.org/2019/09/06/why-cats-pay-a-lower-price-for-cat-scans/ https://catalyst.independent.org/2019/09/06/why-cats-pay-a-l...
thatfrenchguy 4y ago
> Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible. To be fair, they target a very different market. When you buy at 1M, you usually have assets and are required to put 15-20% down and have significant reserves.
- kelnos 4y ago
  > When you buy at 1M, you usually have assets and are required to put 15-20% down and have significant reserves. I don't think it's that different. The banks are still mainly concerned with the income-to-debt ratio, just like with conventional loans. The difference is that often people applying for jumbo mortgage loans will use assets and reserves to try to get the bank to worry less about the income-to-debt ratio. Also 20% down is the standard for a primary-home mortgage loan, regardless of amount. Sometimes that goes to 30% for non-primary-home investment properties, especially if the buyer is not a citizen or green card holder. Lower than 20% is possible, though more difficult to get since 2008, and you usually have to do unfortunate, costly things like obtain mortgage insurance. (We're talking US market here, since this article is about the US. Other markets presumably differ.)
refurb 4y ago
You can’t lump all regulation together. Neither human nor animal healthcare has any sort of price regulation. Hence both have seen inflation. With housing, where lending is a major part of purchasing, price inflation is directly linked to ease of lending.
pdntspa 4y ago
> Both have experienced similar amounts of inflation over the past decade. No way. A pet surgery and care is a 4-to-5 digit sum of dollars, while surgery and care for humans is in the 5-to-7 digit sum range.
- rqtwteye 4y ago
  They have experienced inflation from a different base price but both have experienced enormous inflation. My guess is that pet surgery will soon reach the point where a lot of people aren't willing to pay the price whereas for human surgery they will accept higher prices.
rqtwteye 4y ago
"For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade." The US has a lot of regulation in some areas but there is no regulation as far as pricing goes. Most (all?) countries with universal healthcare regulate pricing. There is simply no way around that. That's why my vote is for Medicare for All.
bottlepalm 4y ago
This isn't about 'regulation', this is about industry using the government as a money piñata. Once cheap money starts flowing into a system, it spreads and makes everything else more expensive. Think of the flood of cash from the Corona Stimulus Bill, $8 trillion dollars rained down on the economy which eventually worked it's way through the system resulting in a massive flood of unprecedented inflation affecting all sectors.
- theGnuMe 4y ago
  I don’t see it that way. A lot of folks paid down debt with that money. Some paid rent because they couldn’t work b/c of COVID.
  - bottlepalm 4y ago
    Stimulus is short term gain, long term pain. The inflation from the stimulus is now permanent and people are back in debt trying to afford things. https://www.cnbc.com/amp/2022/11/16/credit-card-balances-jump-15percent-as-americans-fall-deeper-in-debt.html https://www.cnbc.com/amp/2022/11/16/credit-card-balances-jum...
- bumby 4y ago
  Is the impact different when different mechanisms are used? E.g., Covid stimulus correlates with recent inflation, but quantitative easing more than a decade prior seemed to have little impact.
  - pas 4y ago
    yes. QE was through the banks, they filter loan applications. stimulus was direct. but the important thing is that the supply chain issues were already in full force. COVID shifted consumption from services to products, put a lot of logistics people out of work in an already stressed sector, plus China's zero covid plus their financial problems decimated products supply. then demand shifted back. wages started to rise millions are missing from the labor force (died, early retirement, low immigration numbers) and this all combined with the fucking war (which led to an energy market shock, which absolutely rocked everything) .. well, it's just not the same game at this point. 2008 recovery was too little both fiscal (ARRA) and monetary (QE was new) this was okay, then Trump wanted one more check... and it was not means-tested.
User23 4y ago
The monopoly sovereign currency issuer, in this case the US Congress[1], absolutely has upward pricing power for prices denominated in the currency it issues. By upward I mean they can set prices in anything as high as they like, but not necessarily as low as they like. Imagine if Congress passed a First Time Homebuyer act that would allow any first time buyer to have the government write a check on their behalf for up to a million dollars. All of the marginally desirable housing stock would instantly be priced up to a million dollars. Using loans instead of outright spending money into existence adds hysteresis, but the transmission mechanism remains intact. Edit: Incidentally that's why I oppose every proposed form of Universal Basic Income I've heard of. I like the idea of creating a demand backstop[2], but really it's just going to cause rents to increase by the amount of the subsidy. [1] Both the Federal Reserve and the Department of the Treasury are creatures of Congress and use delegated authority. [2] Well, I like it in an economy with strong productivity. If production can't stay ahead of the increased demand, you'll just get inflation until the UBI is more or less cancelled out in inflation adjusted terms.
- imtringued 4y ago
  Just tax land and pay a citizen's dividend.
CamperBob2 4y ago
My understanding is that veterinary care has pretty much been taken over by private equity in the last 10 years or so. They saw that it wasn't experiencing the same amount of inflation as other health care fields, they considered that to be an exploitable bug in the marketplace, and they've been investing accordingly. So it may not be the best basis for illustrating your larger point.

gjsman-1000 4y ago

> For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade. You forget indirect regulation. Veterinary drugs, veterinary education, and similar are quite regulated and expensive. So much so, that the average cost of vet school for in-state residents is over $200,000. Out-of-state, make it closer to $300K. The average cost of acquiring FDA approval of a new animal drug is $100 million and takes seven years. If you call that "lightly regulated" I don't know what "heavy regulation" is. So, to be honest, I don't believe your comparison is accurate. EDIT: This does depend on the estimate used (my first one was from https://www.veterinarypracticenews.com/efficacy-vs-cost/ https://www.veterinarypracticenews.com/efficacy-vs-cost/). Others say it is closer to $30 million for livestock and 9 years, but costs crossed $62 million in some cases (https://ahi.org/approval-and-regulation-of-animal-medicines/ https://ahi.org/approval-and-regulation-of-animal-medicines/). It seems to depend on how broadly "animal" is defined and the type of drug in question, but it's all under FDA purview. Regardless of how it is defined, it doesn't fall in my view as being nearly as "lightly regulated" as implied.

AlexandrB 4y ago
I think this is completely irrelevant given the much more pertinent example given: > Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible.
- Nacraile 4y ago
  I don't think you can reasonably claim that the market for houses above 750K-1M is independent of the market for houses below.....
  - deleted 4y ago
    [deleted]
  - AlexandrB 4y ago
    Maybe, but what's the mechanism for government guarantees below a certain range increasing demand above that range? Someone who can only qualify for a mortgage because it's guaranteed by the government isn't going to be able to make the jump into a non-guaranteed mortgage easily.

dcolkitt 4y ago

Veterinary spending has increased (as a result of higher disposable incomes leading to higher consumption), but it's not true that the cost of veterinary healthcare has increased. > The researchers track a “basket” of the most commonly-utilized procedures to see how the typical veterinary visit has changed in price over time. According to their research, these ordinary expenses declined by 6 percent from January 2009 to December 2017 after adjusting for inflation. [1]https://catalyst.independent.org/2019/09/06/why-cats-pay-a-lower-price-for-cat-scans/ https://catalyst.independent.org/2019/09/06/why-cats-pay-a-l...

thatfrenchguy 4y ago

> Or, to give an example from the article — houses that are eligible for government guarantees (those below $750K-$1M) have appreciated similar amounts in the past decade to those that's aren't eligible. To be fair, they target a very different market. When you buy at 1M, you usually have assets and are required to put 15-20% down and have significant reserves.

kelnos 4y ago
> When you buy at 1M, you usually have assets and are required to put 15-20% down and have significant reserves. I don't think it's that different. The banks are still mainly concerned with the income-to-debt ratio, just like with conventional loans. The difference is that often people applying for jumbo mortgage loans will use assets and reserves to try to get the bank to worry less about the income-to-debt ratio. Also 20% down is the standard for a primary-home mortgage loan, regardless of amount. Sometimes that goes to 30% for non-primary-home investment properties, especially if the buyer is not a citizen or green card holder. Lower than 20% is possible, though more difficult to get since 2008, and you usually have to do unfortunate, costly things like obtain mortgage insurance. (We're talking US market here, since this article is about the US. Other markets presumably differ.)

refurb 4y ago

You can’t lump all regulation together. Neither human nor animal healthcare has any sort of price regulation. Hence both have seen inflation. With housing, where lending is a major part of purchasing, price inflation is directly linked to ease of lending.

pdntspa 4y ago

> Both have experienced similar amounts of inflation over the past decade. No way. A pet surgery and care is a 4-to-5 digit sum of dollars, while surgery and care for humans is in the 5-to-7 digit sum range.

rqtwteye 4y ago
They have experienced inflation from a different base price but both have experienced enormous inflation. My guess is that pet surgery will soon reach the point where a lot of people aren't willing to pay the price whereas for human surgery they will accept higher prices.

rqtwteye 4y ago

"For example — healthcare is heavily regulated, but veterinary care is lightly regulated. Both have experienced similar amounts of inflation over the past decade." The US has a lot of regulation in some areas but there is no regulation as far as pricing goes. Most (all?) countries with universal healthcare regulate pricing. There is simply no way around that. That's why my vote is for Medicare for All.

bottlepalm 4y ago

This isn't about 'regulation', this is about industry using the government as a money piñata. Once cheap money starts flowing into a system, it spreads and makes everything else more expensive. Think of the flood of cash from the Corona Stimulus Bill, $8 trillion dollars rained down on the economy which eventually worked it's way through the system resulting in a massive flood of unprecedented inflation affecting all sectors.

theGnuMe 4y ago
I don’t see it that way. A lot of folks paid down debt with that money. Some paid rent because they couldn’t work b/c of COVID.
- bottlepalm 4y ago
  Stimulus is short term gain, long term pain. The inflation from the stimulus is now permanent and people are back in debt trying to afford things. https://www.cnbc.com/amp/2022/11/16/credit-card-balances-jump-15percent-as-americans-fall-deeper-in-debt.html https://www.cnbc.com/amp/2022/11/16/credit-card-balances-jum...
bumby 4y ago
Is the impact different when different mechanisms are used? E.g., Covid stimulus correlates with recent inflation, but quantitative easing more than a decade prior seemed to have little impact.
- pas 4y ago
  yes. QE was through the banks, they filter loan applications. stimulus was direct. but the important thing is that the supply chain issues were already in full force. COVID shifted consumption from services to products, put a lot of logistics people out of work in an already stressed sector, plus China's zero covid plus their financial problems decimated products supply. then demand shifted back. wages started to rise millions are missing from the labor force (died, early retirement, low immigration numbers) and this all combined with the fucking war (which led to an energy market shock, which absolutely rocked everything) .. well, it's just not the same game at this point. 2008 recovery was too little both fiscal (ARRA) and monetary (QE was new) this was okay, then Trump wanted one more check... and it was not means-tested.

User23 4y ago

The monopoly sovereign currency issuer, in this case the US Congress[1], absolutely has upward pricing power for prices denominated in the currency it issues. By upward I mean they can set prices in anything as high as they like, but not necessarily as low as they like. Imagine if Congress passed a First Time Homebuyer act that would allow any first time buyer to have the government write a check on their behalf for up to a million dollars. All of the marginally desirable housing stock would instantly be priced up to a million dollars. Using loans instead of outright spending money into existence adds hysteresis, but the transmission mechanism remains intact. Edit: Incidentally that's why I oppose every proposed form of Universal Basic Income I've heard of. I like the idea of creating a demand backstop[2], but really it's just going to cause rents to increase by the amount of the subsidy. [1] Both the Federal Reserve and the Department of the Treasury are creatures of Congress and use delegated authority. [2] Well, I like it in an economy with strong productivity. If production can't stay ahead of the increased demand, you'll just get inflation until the UBI is more or less cancelled out in inflation adjusted terms.

imtringued 4y ago
Just tax land and pay a citizen's dividend.

CamperBob2 4y ago

My understanding is that veterinary care has pretty much been taken over by private equity in the last 10 years or so. They saw that it wasn't experiencing the same amount of inflation as other health care fields, they considered that to be an exploitable bug in the marketplace, and they've been investing accordingly. So it may not be the best basis for illustrating your larger point.