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> Citation please. Look at stock prices, which are primarily owned by the wealthy. The richest 500 people collectively lost $1.4 trillion last year. https://w

by Aunche 4y ago

> Citation please. Look at stock prices, which are primarily owned by the wealthy. The richest 500 people collectively lost $1.4 trillion last year. https://www.bloomberg.com/news/features/2022-12-29/billionaire-wealth-losses-in-2022-hit-1-4-trillion-led-by-elon-musk-jeff-bezos https://www.bloomberg.com/news/features/2022-12-29/billionai... > If they've tempered inflation, then why did the Fed just raise them again, and suggest they might be raised even more? Inflation is still at 6.5%, which is greater than the interest rate. > No, the Fed has explicitly said that their goal is to reduce wage growth. No, they explicitly did not say this. This is the nonsense framing that I'm talking about. The Federal Reserve does fear a wage price spiral, but that's because that's a feedback loop that undermines economic stability. Inflation affects everyone. Meanwhile, wage increases benefit some people more than others, for example younger workers who are happy to job hop. Meanwhile, others are stuck paying higher prices on the same income.

lapcat 4y ago
> The richest 500 people collectively lost $1.4 trillion last year. As far as inequality is concerned, does it really matter whether Elon Musk's net worth is $300 billion vs. $150 billion? The differences were already obscene before the pandemic temporarily inflated them further. I wouldn't call it a dramatic decrease in inequality when most people are still basically standing in place economically. It's easier for the wealthy to go down a lot (temporarily), because they have so much farther to fall, starting from a toweringly high position. Small changes of income and wealth make a big difference to those at the bottom. Relatively massive differences of income and wealth actually don't make much real difference to those at the top. They're mere statistics, points in a game, bragging rights. The reason the Fed is willing to temporarily tank stocks is because the wealthy know it's just a temporarily blip that doesn't really hurt them too badly in the long run. The only thing that could hurt the wealthy in the long run is a fundamental shift in bargaining power between capital and labor. That's precisely what the Fed is trying to stop now. As you call it "a wage price spiral", which could dramatically improve the economic position of the working class. The price of consumer goods can be raised more quickly than the price of labor, which is why in the short term, workers may be hit by inflation, and wage growth lags behind more slowly. But eventually something has to give, and a long-term supply/demand shift of labor would eventually benefit labor in the long run... unless wage inflation is nipped in the bud. Sometimes you have to make short-term sacrifices for long-term benefit. Both capital and labor know this. On the labor side, a strike for example can be very painful short-term to workers, but the goal is to improve their status long term. Consumer price inflation can work the same way. > Inflation affects everyone. Meanwhile, Everything in the economy has a differential effect on different people and groups of people. "Inflation" is an abstraction. The CPI for example is a somewhat arbitrary "basket" of goods. But if you look at individual items, some prices go up a little, some a lot, some go down a little, some a lot, and some stay the same. I find terms like "inflation" and "the economy" to be relatively useless abstractions. It's the differences that are crucial. What we've seen during the recent decades of low "inflation" has been increasing disparities of income and wealth between the top and everyone else. You call that "stability". I call it unstable and unsustainable.

by Aunche 4y ago

lapcat 4y ago

> The richest 500 people collectively lost $1.4 trillion last year. As far as inequality is concerned, does it really matter whether Elon Musk's net worth is $300 billion vs. $150 billion? The differences were already obscene before the pandemic temporarily inflated them further. I wouldn't call it a dramatic decrease in inequality when most people are still basically standing in place economically. It's easier for the wealthy to go down a lot (temporarily), because they have so much farther to fall, starting from a toweringly high position. Small changes of income and wealth make a big difference to those at the bottom. Relatively massive differences of income and wealth actually don't make much real difference to those at the top. They're mere statistics, points in a game, bragging rights. The reason the Fed is willing to temporarily tank stocks is because the wealthy know it's just a temporarily blip that doesn't really hurt them too badly in the long run. The only thing that could hurt the wealthy in the long run is a fundamental shift in bargaining power between capital and labor. That's precisely what the Fed is trying to stop now. As you call it "a wage price spiral", which could dramatically improve the economic position of the working class. The price of consumer goods can be raised more quickly than the price of labor, which is why in the short term, workers may be hit by inflation, and wage growth lags behind more slowly. But eventually something has to give, and a long-term supply/demand shift of labor would eventually benefit labor in the long run... unless wage inflation is nipped in the bud. Sometimes you have to make short-term sacrifices for long-term benefit. Both capital and labor know this. On the labor side, a strike for example can be very painful short-term to workers, but the goal is to improve their status long term. Consumer price inflation can work the same way. > Inflation affects everyone. Meanwhile, Everything in the economy has a differential effect on different people and groups of people. "Inflation" is an abstraction. The CPI for example is a somewhat arbitrary "basket" of goods. But if you look at individual items, some prices go up a little, some a lot, some go down a little, some a lot, and some stay the same. I find terms like "inflation" and "the economy" to be relatively useless abstractions. It's the differences that are crucial. What we've seen during the recent decades of low "inflation" has been increasing disparities of income and wealth between the top and everyone else. You call that "stability". I call it unstable and unsustainable.