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The Lesson of This Election: We Must Stop Inflation Before It Starts

8 points by atombender 2y ago

atombender 2y ago
https://archive.ph/u8l6c https://archive.ph/u8l6c
christophilus 2y ago
John Galbraith wrote a history of money[0] that I enjoyed. In it, he shows that this lesson tends to get relearned on a generational basis. I guess we’re still in the same repeating pattern that he observed. As an aside, Galbraith is the first (and only) intelligent economist I’ve read who is a big fan of price controls. He was in charge of administering them in WWII. I disagree with him on that for a variety of reasons, but his defense made for interesting, thought provoking reading. [0] https://www.amazon.com/dp/0691171661?tag=bravesoftwa04-20&linkCode=osi&th=1&psc=1&language=en_US https://www.amazon.com/dp/0691171661?tag=bravesoftwa04-20&li...
bell-cot 2y ago
> Unemployment weakens governments. Inflation kills them. That’s what a government official from Brazil once told me. But in rich countries, including the United States, the politically destructive power of inflation had been forgotten. Standard policy tools left us unprepared, and the Biden administration was slow to fight back. D'oh, yes. (Though hardly the only lesson.) Ya' know - Biden was around back in the late 1970's - he shoulda been able to remember how much high inflation helped Presidents Ford and Carter to get re-elected. Right? <cough/> Cripes, Biden was already in his late 20's by 1971 - when President Nixon's heavy-handed war against inflation (nation-wide price freezes by Executive Order, among other things) made his position on inflation quite clear. A year or so later, Pres. Nixon was re-elected - winning over sixty percent of the popular vote. Gosh, what a terrible thing to happen... Or - maybe Ol' Joe has long since lost those memory marbles? Or maybe Pres. Biden was just being a proper member of the modern Democratic Party - where doing anything more than pretending to care about the little people, a little bit, for just for a month or few before each election, would have marked him as some sorta weirdo creepy loser, who was "obviously not one of us Democrats"? Still, you'd think that any bright young Democratic advisor who'd taken a good history course or few coulda warned them. Oops!, wait. History is one of those "non-STEM" subjects - that colleges are busy phasing out - isn't it? /rant
deleted 2y ago
[deleted]
jfengel 2y ago
It doesn't strike me as correct that this election was really about the economy. Yes, inflation isn't great. It causes pain, and I expect people to take that out on a President and their party. But this isn't the 1970s. The inflation was present but not double-digits. It peaked two years ago, and has been under 4% for over a year. It's close to 2% now. These just aren't throw-the-bums-out numbers. The alternative has not offered up a cogent answer either. And he is widely reviled. He is a convicted criminal; vast swathes of his cabinet and advisers have spent time in jail. He promotes transparently-false conspiracy theories. Numerous members of his own party endorsed his opponent -- including his own former Vice President. I just don't think it's as simple as "I hate the price of eggs so we need anybody else." The country just isn't in bad enough shape for that explanation to suffice. So I think it's bad advice to tell Democrats to over-fit their policies. Something is going to go wrong during their term. But there seems to be an asymmetry: Democrats will be punished for even the slightest misstep, while Republican candidates can literally call for violent rebellion and receive acclimation for it. Yes, Democrats will continue to have to learn and improve their policies. But it's not going to improve their electoral changes when faced with that asymmetry. I have no advice for them, other than to wait it out. Much has to do with the particular person who is our next President. It's unclear what the nation, and the party, will look like in four years. I don't believe that the particular kind of fine-tuning that the article calls for is really going to benefit them. It just shifts the question away from why we just elected somebody whose first act will be to pardon himself for crimes.
- jfengel 2y ago
  Incidentally... I do expect inflation to fall over the next two years. The key driver of prices was fuel, which impacts everything else. And much of that has to do with sanctions against Russia, a key fossil fuel producer. So I see it as likely that we will end those sanctions, and prices will drop. That will undoubtedly be popular. I also strongly suspect it will be accompanied by a genocide in Ukraine. I consider it unfortunate that Americans won't give that nearly as much weight.
- bell-cot 2y ago
  > But this isn't the 1970s. The inflation was present but not double-digits. It peaked two years ago, and has been under 4% for over a year. It's close to 2% now. These just aren't throw-the-bums-out numbers. For most of the less-well-to-do populace, "inflation" is not some official number published by the government. It is what they experience, in their own lives, when trying to make ends meet every week. In my part of the US (Michigan), many monthly apartment rents rose by more than 50% during Biden's 4 years. Between the already-too-large fractions of their incomes that were going to rent pre-Biden, all the other price increases they were seeing, and Biden's conspicuous lack of interest in them and their plight - those folks had, from their PoV, excellent reason to throw the bums out. And they did - Michigan's 15 Electoral Votes went to Trump.

8 points by atombender 2y ago

https://archive.ph/u8l6c https://archive.ph/u8l6c

John Galbraith wrote a history of money[0] that I enjoyed. In it, he shows that this lesson tends to get relearned on a generational basis. I guess we’re still in the same repeating pattern that he observed. As an aside, Galbraith is the first (and only) intelligent economist I’ve read who is a big fan of price controls. He was in charge of administering them in WWII. I disagree with him on that for a variety of reasons, but his defense made for interesting, thought provoking reading. [0] https://www.amazon.com/dp/0691171661?tag=bravesoftwa04-20&linkCode=osi&th=1&psc=1&language=en_US https://www.amazon.com/dp/0691171661?tag=bravesoftwa04-20&li...

bell-cot 2y ago

> Unemployment weakens governments. Inflation kills them. That’s what a government official from Brazil once told me. But in rich countries, including the United States, the politically destructive power of inflation had been forgotten. Standard policy tools left us unprepared, and the Biden administration was slow to fight back. D'oh, yes. (Though hardly the only lesson.) Ya' know - Biden was around back in the late 1970's - he shoulda been able to remember how much high inflation helped Presidents Ford and Carter to get re-elected. Right? <cough/> Cripes, Biden was already in his late 20's by 1971 - when President Nixon's heavy-handed war against inflation (nation-wide price freezes by Executive Order, among other things) made his position on inflation quite clear. A year or so later, Pres. Nixon was re-elected - winning over sixty percent of the popular vote. Gosh, what a terrible thing to happen... Or - maybe Ol' Joe has long since lost those memory marbles? Or maybe Pres. Biden was just being a proper member of the modern Democratic Party - where doing anything more than pretending to care about the little people, a little bit, for just for a month or few before each election, would have marked him as some sorta weirdo creepy loser, who was "obviously not one of us Democrats"? Still, you'd think that any bright young Democratic advisor who'd taken a good history course or few coulda warned them. Oops!, wait. History is one of those "non-STEM" subjects - that colleges are busy phasing out - isn't it? /rant

deleted 2y ago

[deleted]

jfengel 2y ago

It doesn't strike me as correct that this election was really about the economy. Yes, inflation isn't great. It causes pain, and I expect people to take that out on a President and their party. But this isn't the 1970s. The inflation was present but not double-digits. It peaked two years ago, and has been under 4% for over a year. It's close to 2% now. These just aren't throw-the-bums-out numbers. The alternative has not offered up a cogent answer either. And he is widely reviled. He is a convicted criminal; vast swathes of his cabinet and advisers have spent time in jail. He promotes transparently-false conspiracy theories. Numerous members of his own party endorsed his opponent -- including his own former Vice President. I just don't think it's as simple as "I hate the price of eggs so we need anybody else." The country just isn't in bad enough shape for that explanation to suffice. So I think it's bad advice to tell Democrats to over-fit their policies. Something is going to go wrong during their term. But there seems to be an asymmetry: Democrats will be punished for even the slightest misstep, while Republican candidates can literally call for violent rebellion and receive acclimation for it. Yes, Democrats will continue to have to learn and improve their policies. But it's not going to improve their electoral changes when faced with that asymmetry. I have no advice for them, other than to wait it out. Much has to do with the particular person who is our next President. It's unclear what the nation, and the party, will look like in four years. I don't believe that the particular kind of fine-tuning that the article calls for is really going to benefit them. It just shifts the question away from why we just elected somebody whose first act will be to pardon himself for crimes.

jfengel 2y ago
Incidentally... I do expect inflation to fall over the next two years. The key driver of prices was fuel, which impacts everything else. And much of that has to do with sanctions against Russia, a key fossil fuel producer. So I see it as likely that we will end those sanctions, and prices will drop. That will undoubtedly be popular. I also strongly suspect it will be accompanied by a genocide in Ukraine. I consider it unfortunate that Americans won't give that nearly as much weight.
bell-cot 2y ago
> But this isn't the 1970s. The inflation was present but not double-digits. It peaked two years ago, and has been under 4% for over a year. It's close to 2% now. These just aren't throw-the-bums-out numbers. For most of the less-well-to-do populace, "inflation" is not some official number published by the government. It is what they experience, in their own lives, when trying to make ends meet every week. In my part of the US (Michigan), many monthly apartment rents rose by more than 50% during Biden's 4 years. Between the already-too-large fractions of their incomes that were going to rent pre-Biden, all the other price increases they were seeing, and Biden's conspicuous lack of interest in them and their plight - those folks had, from their PoV, excellent reason to throw the bums out. And they did - Michigan's 15 Electoral Votes went to Trump.