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When you give to 300+ million people extra cash to spend, you have inflation, yes. I am not arguing that “before” it was better for the “little guys”, I am jus

by fosk 4y ago

When you give to 300+ million people extra cash to spend, you have inflation, yes. I am not arguing that “before” it was better for the “little guys”, I am just making an observation. You can affect the economy with fiscal policy (what our politicians/government does) and monetary policy (the central bank). Turns out monetary policy didn’t cause inflation to rise as much, as the previous 13 years demonstrate, but it was caused by liberal fiscal policy after Covid (all those points that I mentioned + supply chain bottlenecks). The fact that our government blames the Fed is just scapegoating. They messed up big time, and acted quickly in such a way that they were not able to coordinate properly (rates should have gone up in light of liberal fiscal policies being implemented). These two entities don’t work and collaborate well together, and hindsight is 20/20.

lumost 4y ago
This is severely dismissing the economic distortion of monetary stimulus. We’ve effectively been printing money into wealthy individuals assets. Increasing wealth inequality has tangible negative effects on the economy and effectively functions as a reverse tax.
- fosk 4y ago
  > Increasing wealth inequality has tangible negative effects on the economy and effectively functions as a reverse tax. I am not sure I understand what you are trying to say. Inflation either spikes up because of increased of demand, or lack of supply. In our case, both have happened: * Increased demand because free money is hitting the bank accounts of almost everyone. * Decreased supply because of supply chain bottlenecks, when every vendor canceled their orders in anticipation of a lack of demand (which never happened, with Covid), and then all of a sudden had to place again the same orders. Since every vendor practiced Just-In-Time order of all parts, the sudden demand (or - to put it in other words - the "lack of demand" which never happened) put them in a though spot where everyone was re-ordering the same parts again, but factories had to start with a fresh order queue. This is not a "wealthy people problem", this is a "everyone is creating demand" problem. Wealthy people cannot create inflation in common goods because they are both outnumbered by regular folks, and because there is not too many of them anyways. How many eggs can a wealthy family purchase anyways? The demand of wealthy people is otherwise focused on goods that are not affecting the rest of the pyramid (does anybody care if yachts are price inflated because too many wealthy people buy them?). Easy access to money caused inflation along with a supply chain bottleneck, the easy money that caused inflation was not ~2-3% loans that were accessible for 13 years prior to Covid, it was PPP loans, stimulus checks, and student loan pause, which all combined was given to pretty much the entire population of the US. Next thing you know, inflation is up. I am not saying that people didn't deserve handouts for a very unique and though time in the history of their lives (Covid), I am just making an observation with the benefit of hindsight.
  - lumost 4y ago
    My argument is that the last 13 years of low interest rates produced a distorted economy where wealthy individuals gained more wealth without making profits, and those without assets saw their incomes and living standards stagnate. Low-interest rates produced companies like Uber, and socialized losses for bank failures. Low-interest rates meant TSLA became the most valuable company in the world while turning a loss. When you print money, Its unsurprising that those closest to the money printer will accumulate the most money.
    - fosk 4y ago
      I don't disagree with anything that you are saying. The parent topic is about inflation, and throughout the least 13 years, inflation has not been a problem until - in my opinion - faulty fiscal policy during Covid. In other words, had both monetary and fiscal policy stayed the same, inflation would not have happened to the extent we are dealing with right now. But fiscal policy (government handouts) was extremely liberal after Covid, and that put us out of balance.
      - rqtwteye 4y ago
        "and throughout the least 13 years, inflation has not been a problem until - in my opinion - faulty fiscal policy during Covid." It was a problem for a lot of people who either got priced out of the housing market or have huge student loans or have huge healthcare bills. The price of eggs or gas is really not much of a problem when the price of these big ticket items shoots up.
        fosk 4y ago
        > It was a problem for a lot of people who either got priced out of the housing market or have huge student loans.. It may have been, but that was not reflected in the CPI, and we are talking about inflation as it is officially recorded in the CPI reports. The CPI inflation didn't spike up until early 2021.
        4y ago
8note 4y ago
This keeps the question "what is inflation?" If you consider that assets and results rents on those assets skyrocketed while "inflation" wasn't happening, then sure, but realistically, the dollar lost value and people got poorer in that time while having the same or increasing income

by fosk 4y ago

lumost 4y ago

This is severely dismissing the economic distortion of monetary stimulus. We’ve effectively been printing money into wealthy individuals assets. Increasing wealth inequality has tangible negative effects on the economy and effectively functions as a reverse tax.

fosk 4y ago
> Increasing wealth inequality has tangible negative effects on the economy and effectively functions as a reverse tax. I am not sure I understand what you are trying to say. Inflation either spikes up because of increased of demand, or lack of supply. In our case, both have happened: * Increased demand because free money is hitting the bank accounts of almost everyone. * Decreased supply because of supply chain bottlenecks, when every vendor canceled their orders in anticipation of a lack of demand (which never happened, with Covid), and then all of a sudden had to place again the same orders. Since every vendor practiced Just-In-Time order of all parts, the sudden demand (or - to put it in other words - the "lack of demand" which never happened) put them in a though spot where everyone was re-ordering the same parts again, but factories had to start with a fresh order queue. This is not a "wealthy people problem", this is a "everyone is creating demand" problem. Wealthy people cannot create inflation in common goods because they are both outnumbered by regular folks, and because there is not too many of them anyways. How many eggs can a wealthy family purchase anyways? The demand of wealthy people is otherwise focused on goods that are not affecting the rest of the pyramid (does anybody care if yachts are price inflated because too many wealthy people buy them?). Easy access to money caused inflation along with a supply chain bottleneck, the easy money that caused inflation was not ~2-3% loans that were accessible for 13 years prior to Covid, it was PPP loans, stimulus checks, and student loan pause, which all combined was given to pretty much the entire population of the US. Next thing you know, inflation is up. I am not saying that people didn't deserve handouts for a very unique and though time in the history of their lives (Covid), I am just making an observation with the benefit of hindsight.
- lumost 4y ago
  My argument is that the last 13 years of low interest rates produced a distorted economy where wealthy individuals gained more wealth without making profits, and those without assets saw their incomes and living standards stagnate. Low-interest rates produced companies like Uber, and socialized losses for bank failures. Low-interest rates meant TSLA became the most valuable company in the world while turning a loss. When you print money, Its unsurprising that those closest to the money printer will accumulate the most money.
  - fosk 4y ago
    I don't disagree with anything that you are saying. The parent topic is about inflation, and throughout the least 13 years, inflation has not been a problem until - in my opinion - faulty fiscal policy during Covid. In other words, had both monetary and fiscal policy stayed the same, inflation would not have happened to the extent we are dealing with right now. But fiscal policy (government handouts) was extremely liberal after Covid, and that put us out of balance.
    - rqtwteye 4y ago
      "and throughout the least 13 years, inflation has not been a problem until - in my opinion - faulty fiscal policy during Covid." It was a problem for a lot of people who either got priced out of the housing market or have huge student loans or have huge healthcare bills. The price of eggs or gas is really not much of a problem when the price of these big ticket items shoots up.
      - fosk 4y ago
        > It was a problem for a lot of people who either got priced out of the housing market or have huge student loans.. It may have been, but that was not reflected in the CPI, and we are talking about inflation as it is officially recorded in the CPI reports. The CPI inflation didn't spike up until early 2021.
        4y ago

8note 4y ago

This keeps the question "what is inflation?" If you consider that assets and results rents on those assets skyrocketed while "inflation" wasn't happening, then sure, but realistically, the dollar lost value and people got poorer in that time while having the same or increasing income