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The trouble is that with unemployment it only affects a small percentage of the population and those people blame themselves (as long as it's not a 1930s-style

by rwmj 1y ago

The trouble is that with unemployment it only affects a small percentage of the population and those people blame themselves (as long as it's not a 1930s-style depression), but with inflation everyone feels it every time they go to the shops. So in a democracy any policy that prefers inflation over unemployment is going to be deeply unpopular. (See also: Biden) Currency depreciation is an interesting one though. It's like inflation on steroids, but very few people really feel it day to day.

cjbenedikt 1y ago
Unemployment triggered the rise of Nazis in Germany https://www.bbc.co.uk/bitesize/guides/zpvhk7h/revision/1#:~:text=The%20most%20obvious%20consequence%20of,lost%20their%20jobs%20even%20poorer https://www.bbc.co.uk/bitesize/guides/zpvhk7h/revision/1#:~:... Germany's Chancelor Helmut Schmidt used to say: " I prefer 5% inflation over 5% unemployment."
- rwmj 1y ago
  Germany in the 1920s had hyperinflation so the idea that the rise of the Nazis was caused only by unemployment is, erm, arguable at best. At the very least, hyperinflation so destroyed the economy as to be the cause of the unemployment.
  - fuzzfactor 1y ago
    >hyperinflation so destroyed the economy as to be the cause of the unemployment. You're not kidding. I'm glad all we had was merely spiraling out-of-control inflation in the 1970's & 1980's or millions more would have been laid off as a direct result, and the economy could have been as badly destroyed as post-WWI Germany, rather than the more moderate permanent damage we had here. Simply due to one untrustworthy President and the cascading effect of those who trusted him and supported him anyway. Not like there's any question.
  - jfengel 1y ago
    They have a unified cause: a destroyed economy. Unemployment is high because there is nothing to do; prices go up because there is nothing to buy. That inflation becomes hyperinflation when the government tries to break that cycle by pumping money into the economy. Done properly, that's just the same "quantitative easing" that we had in the 2010s. "Properly" means that you end it just as it takes effect. But if it doesn't have that effect, it becomes a self-reinforcing cycle. It's not the cause of the economic breakdown, but it is an easy way to quantify it. Hyperinflation usually comes after a war, or sometimes after a government collapse. Something that completely stops all productivity in the country. Germany had a massive reparations bill, so what little work was getting done mostly got shipped out of the country.

by rwmj 1y ago

cjbenedikt 1y ago

Unemployment triggered the rise of Nazis in Germany https://www.bbc.co.uk/bitesize/guides/zpvhk7h/revision/1#:~:text=The%20most%20obvious%20consequence%20of,lost%20their%20jobs%20even%20poorer https://www.bbc.co.uk/bitesize/guides/zpvhk7h/revision/1#:~:... Germany's Chancelor Helmut Schmidt used to say: " I prefer 5% inflation over 5% unemployment."

rwmj 1y ago
Germany in the 1920s had hyperinflation so the idea that the rise of the Nazis was caused only by unemployment is, erm, arguable at best. At the very least, hyperinflation so destroyed the economy as to be the cause of the unemployment.
- fuzzfactor 1y ago
  >hyperinflation so destroyed the economy as to be the cause of the unemployment. You're not kidding. I'm glad all we had was merely spiraling out-of-control inflation in the 1970's & 1980's or millions more would have been laid off as a direct result, and the economy could have been as badly destroyed as post-WWI Germany, rather than the more moderate permanent damage we had here. Simply due to one untrustworthy President and the cascading effect of those who trusted him and supported him anyway. Not like there's any question.
- jfengel 1y ago
  They have a unified cause: a destroyed economy. Unemployment is high because there is nothing to do; prices go up because there is nothing to buy. That inflation becomes hyperinflation when the government tries to break that cycle by pumping money into the economy. Done properly, that's just the same "quantitative easing" that we had in the 2010s. "Properly" means that you end it just as it takes effect. But if it doesn't have that effect, it becomes a self-reinforcing cycle. It's not the cause of the economic breakdown, but it is an easy way to quantify it. Hyperinflation usually comes after a war, or sometimes after a government collapse. Something that completely stops all productivity in the country. Germany had a massive reparations bill, so what little work was getting done mostly got shipped out of the country.