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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 mak

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.
  - bumby 4y ago
    >wages started to rise I think everything you said made sense. But just to balance it out, there was a recent Planet Money podcast that explained that wage inflation is not the primary cause and that 55% of inflation is attributed to increased profit margin. The rebuttal from another Econ is this is just temporary anomaly and we’ll see wages rise to erode those profits.
    - pas 4y ago
      wages will definitely (okay, very very likely) rise, because there is just such a huge gap in jobs and workers. graph here: https://twitter.com/jasonfurman/status/1598042298717155329 https://twitter.com/jasonfurman/status/1598042298717155329 https://www.federalreserve.gov/newsevents/speech/powell20221130a.htm https://www.federalreserve.gov/newsevents/speech/powell20221...
      - bumby 4y ago
        I think the larger point I was getting at is that current inflation may not be attributed to wage inflation. I’m not discounting that future inflation may come from increased wages, just that it doesn’t seem to be the whole story in the current scenario.
pas 4y ago
it's not unprecedented, and don't forget the supply side issues. inflation started to really blow up when the energy prices did arguably the effects of the stimulus were masked by the big unemployment due to COVID, and when it decreased enough for the wage rises to start to get felt the spiral started, and the Fed acted late (because in the post 2008 recovery they acted too fast)

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.
- bumby 4y ago
  >wages started to rise I think everything you said made sense. But just to balance it out, there was a recent Planet Money podcast that explained that wage inflation is not the primary cause and that 55% of inflation is attributed to increased profit margin. The rebuttal from another Econ is this is just temporary anomaly and we’ll see wages rise to erode those profits.
  - pas 4y ago
    wages will definitely (okay, very very likely) rise, because there is just such a huge gap in jobs and workers. graph here: https://twitter.com/jasonfurman/status/1598042298717155329 https://twitter.com/jasonfurman/status/1598042298717155329 https://www.federalreserve.gov/newsevents/speech/powell20221130a.htm https://www.federalreserve.gov/newsevents/speech/powell20221...
    - bumby 4y ago
      I think the larger point I was getting at is that current inflation may not be attributed to wage inflation. I’m not discounting that future inflation may come from increased wages, just that it doesn’t seem to be the whole story in the current scenario.

pas 4y ago

it's not unprecedented, and don't forget the supply side issues. inflation started to really blow up when the energy prices did arguably the effects of the stimulus were masked by the big unemployment due to COVID, and when it decreased enough for the wage rises to start to get felt the spiral started, and the Fed acted late (because in the post 2008 recovery they acted too fast)