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> Inflation should be low and we should make it in the interests of the rich that it stays so. The prevailing opinion of a lot of progressive economists is jus
by Analemma_ 1y ago
> Inflation should be low and we should make it in the interests of the rich that it stays so.
The prevailing opinion of a lot of progressive economists is just the opposite: standard policy for 40 years post-Volcker was to run with low inflation, loose money and slack labor markets, and probably all this did was keep wage growth depressed.
The brief inflationary period in 2022-2023 was fantastic for low-income workers, it was the only serious growth in real wages they'd seen in a half-century. But voters revolted and probably guaranteed we'll go back to the low inflation, high unemployment policy for another generation at least.
- msgodel 1y agoGrowth in wages is meaningless if inflation consumes it. My opinion is that inflation is generally a bad idea but the thing that really matters is inflation volatility. The market will adjust for whatever the inflation rate is (unless its extreme) but volatility just results in loss.
- Analemma_ 1y agoThat's why I specifically said real wage growth. In 2022-2023 wages for the bottom ~35% of workers increased at their fastest rate after accounting for inflation. Inflation-adjusted wages for the middle ~40% were basically flat and decreased for the upper quartile. And since that last cohort is the one which dictates policy, they'll make sure it won't happen again.