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And that's why there's a desire to make interest rates lower: cheap money is good for propping up bubbles. Now, it does that at the expense of the average pers

And that's why there's a desire to make interest rates lower: cheap money is good for propping up bubbles. Now, it does that at the expense of the average person, but it will definitely prop up the bubble just long enough for the next election cycle to hit.

thrance 1y ago
Trump and his administration harassing the Fed and Powell over interest rates is like a swarm of locust salivating at ripened wheat fields. They want a quick feast at the expense of everything and everyone else, including themselves over the long term.
- dylan604 1y ago
  Trump knows that the next POTUS can just reverse his decisions much like he's done in both of his at bats. Only thing is there is no next at bat for Trump (without major changes that would be quite devastating), so he's got to get them in now. The sooner the better to take as much advantage of being in control.
- pessimizer 1y ago
  The left is almost completely unanimous in their support for lowering interest rates, and have been screaming about it for years, since the first moment they started being raised again. And for the same reasons that Trump wants it, except without the negative connotations for some reason. Recently, I've heard many left wingers, as a response to Trump's tariffs, start 1) railing about taxes being too high, and that tariffs are taxes so they're bad, and 2) saying that the US trade deficit is actually wonderful because it gives us all this free money for nothing. I know all of these are opposite positions to every one of the central views of the left of 30 years ago, but politics is a video game now. Lefties are going out of their way to repeat the old progressive refrain: > "The way that Trump is doing it is all wrong, is a sign of mental instability, is cunning psychopathic genius and will resurrect Russia's Third Reich, but in a twisted way he has blundered into something resembling a point..." "...the Fed shouldn't be independent and they should lower interest rates now."
  - mason_mpls 1y ago
    I have not heard a single left wing pundit demand interest rates go down
    - rockemsockem 1y ago
      Elizabeth Warren has gone on several talk shows insisting interest rates should be lowered. If you look at video from the last time Powell was being questioned by Congress there were many other Democratic congress-people asking him why he wouldn't lower rates. Personally I trust Jerome Powell more than any other part of the government at the moment. The man is made of steel.
      - mason_mpls 1y ago
        Jerome Powell belongs on Mt Rushmore if you ask me
      - no_wizard 1y ago
        He's entirely too cozy with big banks. He's one of their biggest advocates when it comes to policy. I think Elizabeth Warren had a point here[0] [0]: https://www.bloomberg.com/news/articles/2024-07-03/senator-warren-accuses-powell-of-letting-big-banks-ceos-get-too-much-sway https://www.bloomberg.com/news/articles/2024-07-03/senator-w...
        rockemsockem 1y ago
        Coziness with banks can certainly be an issue, I don't know specifics and that article is pay walled for me, but it sounds very believable to me. That doesn't really change what I said regarding interest rates though.
    - deleted 1y ago
      [deleted]
  - thrance 1y ago
    Who cares? Even if it were true, why is your first reflex to point the finger at progressives when they're absolutely irrelevant to the current government?
decimalenough 1y ago
You really think the AI bubble can be sustained for another three years?
- dylan604 1y ago
  15 months. Mid-terms are next November. After that, legacy cannot be changed by election. If POTUS loses control of either/both chambers, he might have some 'splanin to do. If POTUS keeps control and/or makes further gains, there might not be an election in 3 years.
  - Hikikomori 1y ago
    Gerrymandering in Texas and elsewhere they might stay in power, if they do it's unlikely to change. Basically speed running a fascist takeover.
    - dylan604 1y ago
      Interesting to see if California follows suit. Governor Newsom has his eye on the 2028 prize it seems. If the Dems do not wake up and start playing the same game the GOP is playing, they will never win. Taking the higher ground is such a nice concept, but it's also what losers say to feel good about not winning. Meanwhile, those willing to break/bend/change rules to ensure they continue to win will, well, continue to win.
      - SpicyLemonZest 1y ago
        I think it's important to remember how California got here. In the 2000 redistricting, the state legislature agreed to conduct an extreme bipartisan gerrymander, drawing every seat to be as safe as possible so that no incumbent could get voted out without losing a primary. This was widely understood to be a conspiracy of politicians against democratic accountability, and thus voters decided (with the support of many advocacy orgs and every major newspaper in the state) to put an end to it. That's not the redistricting Newsom wants for 2028, and I tend to agree that Dems have to play the game right now, but I'd really like to see them present some sort of story for why it's not going to happen again.
bluecalm 1y ago
I am curious, why do you think lower interest rates are bad for an average person?
- mason_mpls 1y ago
  We want interest rates as close to zero as possible. However they’re also the only reliable tool available to stop inflation. Youre implying the country exerting financial responsibility to control inflation isn’t good. Not using interest rates to control inflation caused the stagflation crisis of the 70s, and ended when Volcker set rates to 20%.
- verdverm 1y ago
  more money in the economy drives inflation, which largely affects those with less disposable income This is why in a hot economy we raise rates, and in a not economy we lower them (oversimplification, but it is a commonly provided explanation)
  - tharmas 1y ago
    >more money in the economy drives inflation Not necessarily. Sure, it that money is chasing fixed assets like housing but if that money was invested into production of things to consume its not necessarily inflation inducing is it? For example, if that money went into expanding the electricity grid and production of electric cars, the pool of goods to be consumed is expanding so there is less likelihood of inflation.
    - verdverm 1y ago
      > if that money was invested into production of things to consume its not necessarily inflation inducing is it People are paid salaries to work at these production facilities, which means they have more money to spend, and the competition drives people to be willing to spend more to get the outputs. Not all outputs will be scaled, those that aren't experience inflation, like food and housing today
  - 827a 1y ago
highfrequency 1y ago
Careful not to automatically slip into a zero sum mindset - it is possible that low interest rates benefit everyone even if the benefits disproportionately go to one class over another. (Example: lowering interest rates after the Financial Crisis - certainly good for banks, but lowering unemployment is critical for normal people too). In the same way that UBI would disproportionately benefit poor people, but considered with its downstream effects could benefit rich people too.

thrance 1y ago

Trump and his administration harassing the Fed and Powell over interest rates is like a swarm of locust salivating at ripened wheat fields. They want a quick feast at the expense of everything and everyone else, including themselves over the long term.

dylan604 1y ago
Trump knows that the next POTUS can just reverse his decisions much like he's done in both of his at bats. Only thing is there is no next at bat for Trump (without major changes that would be quite devastating), so he's got to get them in now. The sooner the better to take as much advantage of being in control.
pessimizer 1y ago
The left is almost completely unanimous in their support for lowering interest rates, and have been screaming about it for years, since the first moment they started being raised again. And for the same reasons that Trump wants it, except without the negative connotations for some reason. Recently, I've heard many left wingers, as a response to Trump's tariffs, start 1) railing about taxes being too high, and that tariffs are taxes so they're bad, and 2) saying that the US trade deficit is actually wonderful because it gives us all this free money for nothing. I know all of these are opposite positions to every one of the central views of the left of 30 years ago, but politics is a video game now. Lefties are going out of their way to repeat the old progressive refrain: > "The way that Trump is doing it is all wrong, is a sign of mental instability, is cunning psychopathic genius and will resurrect Russia's Third Reich, but in a twisted way he has blundered into something resembling a point..." "...the Fed shouldn't be independent and they should lower interest rates now."
- mason_mpls 1y ago
  I have not heard a single left wing pundit demand interest rates go down
  - rockemsockem 1y ago
    Elizabeth Warren has gone on several talk shows insisting interest rates should be lowered. If you look at video from the last time Powell was being questioned by Congress there were many other Democratic congress-people asking him why he wouldn't lower rates. Personally I trust Jerome Powell more than any other part of the government at the moment. The man is made of steel.
    - mason_mpls 1y ago
      Jerome Powell belongs on Mt Rushmore if you ask me
    - no_wizard 1y ago
      He's entirely too cozy with big banks. He's one of their biggest advocates when it comes to policy. I think Elizabeth Warren had a point here[0] [0]: https://www.bloomberg.com/news/articles/2024-07-03/senator-warren-accuses-powell-of-letting-big-banks-ceos-get-too-much-sway https://www.bloomberg.com/news/articles/2024-07-03/senator-w...
      - rockemsockem 1y ago
        Coziness with banks can certainly be an issue, I don't know specifics and that article is pay walled for me, but it sounds very believable to me. That doesn't really change what I said regarding interest rates though.
  - deleted 1y ago
    [deleted]
- thrance 1y ago
  Who cares? Even if it were true, why is your first reflex to point the finger at progressives when they're absolutely irrelevant to the current government?

decimalenough 1y ago

You really think the AI bubble can be sustained for another three years?

dylan604 1y ago
15 months. Mid-terms are next November. After that, legacy cannot be changed by election. If POTUS loses control of either/both chambers, he might have some 'splanin to do. If POTUS keeps control and/or makes further gains, there might not be an election in 3 years.
- Hikikomori 1y ago
  Gerrymandering in Texas and elsewhere they might stay in power, if they do it's unlikely to change. Basically speed running a fascist takeover.
  - dylan604 1y ago
    Interesting to see if California follows suit. Governor Newsom has his eye on the 2028 prize it seems. If the Dems do not wake up and start playing the same game the GOP is playing, they will never win. Taking the higher ground is such a nice concept, but it's also what losers say to feel good about not winning. Meanwhile, those willing to break/bend/change rules to ensure they continue to win will, well, continue to win.
    - SpicyLemonZest 1y ago
      I think it's important to remember how California got here. In the 2000 redistricting, the state legislature agreed to conduct an extreme bipartisan gerrymander, drawing every seat to be as safe as possible so that no incumbent could get voted out without losing a primary. This was widely understood to be a conspiracy of politicians against democratic accountability, and thus voters decided (with the support of many advocacy orgs and every major newspaper in the state) to put an end to it. That's not the redistricting Newsom wants for 2028, and I tend to agree that Dems have to play the game right now, but I'd really like to see them present some sort of story for why it's not going to happen again.

bluecalm 1y ago

I am curious, why do you think lower interest rates are bad for an average person?

mason_mpls 1y ago
We want interest rates as close to zero as possible. However they’re also the only reliable tool available to stop inflation. Youre implying the country exerting financial responsibility to control inflation isn’t good. Not using interest rates to control inflation caused the stagflation crisis of the 70s, and ended when Volcker set rates to 20%.
verdverm 1y ago
more money in the economy drives inflation, which largely affects those with less disposable income This is why in a hot economy we raise rates, and in a not economy we lower them (oversimplification, but it is a commonly provided explanation)
- tharmas 1y ago
  >more money in the economy drives inflation Not necessarily. Sure, it that money is chasing fixed assets like housing but if that money was invested into production of things to consume its not necessarily inflation inducing is it? For example, if that money went into expanding the electricity grid and production of electric cars, the pool of goods to be consumed is expanding so there is less likelihood of inflation.
  - verdverm 1y ago
    > if that money was invested into production of things to consume its not necessarily inflation inducing is it People are paid salaries to work at these production facilities, which means they have more money to spend, and the competition drives people to be willing to spend more to get the outputs. Not all outputs will be scaled, those that aren't experience inflation, like food and housing today
- 827a 1y ago

highfrequency 1y ago

Careful not to automatically slip into a zero sum mindset - it is possible that low interest rates benefit everyone even if the benefits disproportionately go to one class over another. (Example: lowering interest rates after the Financial Crisis - certainly good for banks, but lowering unemployment is critical for normal people too). In the same way that UBI would disproportionately benefit poor people, but considered with its downstream effects could benefit rich people too.