Inflation Scaremongering
ml1 said:
the point I've made many times is that even if 30% of the past years inflation is indeed due to COVID relief spending it was a price we needed to pay. The alternative would almost certainly have been a great deal of real suffering for tens of millions of people. Losing their homes, going hungry, businesses that didn't survive. Again, sometimes there are worse outcomes than inflation.
This is incorrect. This was not due to Covid. The problems you mention were due to the government intervention associated to Covid. And much still occurred even with the ill advised monetary and fiscal interventions.
Not to mention that Monetary policy has been off the rails for well over a generation now. We do not criticize official for these, what we'll consider mistakes. Rather, we give them Nobel prizes. And the rabble cheer and ask for more.
Smedley said:
How about if it was 60% (which was the other FRB estimate)?
You know I would agree with you, iff today was the last page of this novel. But it's not. Most likely we're a ways away from resolving this inflationary situation. Maybe inflation is brought down to 2-3% without too much pain. Or maybe it's a long and drawn-out mud fight that results in a severe recession and causes just the kind of suffering you describe, in spades.
So IMO it's very possible that the consequences of inflation prove worse than the consequences of not opening the spigots on fiscal and monetary policy in 2020-21 would have been.
Here's why you miss the point.
You describe possible severe "consequences of inflation". But it's not the consequences of inflation that we have to worry about. It's the consequences of the Fed's attempts to fight inflation. And why you may think they're all knowing, they're really not. As has been explained at some length in this thread.
You've got your narrative. The damn liberals overspent, caused horrific inflation, and the Fed has to raise rates.
Evidence be damned. Full speed ahead into a policy that will hurt most the very people that are hurting from inflation. I mean, do you realize that?
And that's the point, but you're so buried into (selected) MOR authority figures that you don't see it.
Overspending is clearly bi-partisan. But I'll steal a line from Michael Malice. Conservatives are just Progressives driving the speed limit.
terp said:
Overspending is clearly bi-partisan. But I'll steal a line from Michael Malice. Conservatives are just Progressives driving the speed limit.
in the left lane…with their hazard lights on…
drummerboy said:
Smedley said:
How about if it was 60% (which was the other FRB estimate)?
You know I would agree with you, iff today was the last page of this novel. But it's not. Most likely we're a ways away from resolving this inflationary situation. Maybe inflation is brought down to 2-3% without too much pain. Or maybe it's a long and drawn-out mud fight that results in a severe recession and causes just the kind of suffering you describe, in spades.
So IMO it's very possible that the consequences of inflation prove worse than the consequences of not opening the spigots on fiscal and monetary policy in 2020-21 would have been.
Here's why you miss the point.
You describe possible severe "consequences of inflation". But it's not the consequences of inflation that we have to worry about. It's the consequences of the Fed's attempts to fight inflation. And why you may think they're all knowing, they're really not. As has been explained at some length in this thread.
You've got your narrative. The damn liberals overspent, caused horrific inflation, and the Fed has to raise rates.
Evidence be damned. Full speed ahead into a policy that will hurt most the very people that are hurting from inflation. I mean, do you realize that?
And that's the point, but you're so buried into (selected) MOR authority figures that you don't see it.
My "missing the point" is really me not buying in to your crackpot narrative that 8% inflation is fine, np, and the Fed should be sitting on its hands. So yes, I do indeed miss that point.
Smedley said:
drummerboy said:
Smedley said:
How about if it was 60% (which was the other FRB estimate)?
You know I would agree with you, iff today was the last page of this novel. But it's not. Most likely we're a ways away from resolving this inflationary situation. Maybe inflation is brought down to 2-3% without too much pain. Or maybe it's a long and drawn-out mud fight that results in a severe recession and causes just the kind of suffering you describe, in spades.
So IMO it's very possible that the consequences of inflation prove worse than the consequences of not opening the spigots on fiscal and monetary policy in 2020-21 would have been.
Here's why you miss the point.
You describe possible severe "consequences of inflation". But it's not the consequences of inflation that we have to worry about. It's the consequences of the Fed's attempts to fight inflation. And why you may think they're all knowing, they're really not. As has been explained at some length in this thread.
You've got your narrative. The damn liberals overspent, caused horrific inflation, and the Fed has to raise rates.
Evidence be damned. Full speed ahead into a policy that will hurt most the very people that are hurting from inflation. I mean, do you realize that?
And that's the point, but you're so buried into (selected) MOR authority figures that you don't see it.
My "missing the point" is really me not buying in to your crackpot narrative that 8% inflation is fine, np, and the Fed should be sitting on its hands. So yes, I do indeed miss that point.
You need to get out more.
terp said:
Overspending is clearly bi-partisan. But I'll steal a line from Michael Malice. Conservatives are just Progressives driving the speed limit.
When you meet a conservative, let me know.
ridski said:
terp said:
Overspending is clearly bi-partisan. But I'll steal a line from Michael Malice. Conservatives are just Progressives driving the speed limit.
When you meet a conservative, let me know.
The Federalist has apparently published something worth reading.
https://thefederalist.com/2022/10/20/we-need-to-stop-calling-ourselves-conservatives/
So what kind of politics should conservatives today, as inheritors of a failed movement, adopt? For starters, they should stop thinking of themselves as conservatives (much less as Republicans) and start thinking of themselves as radicals, restorationists, and counterrevolutionaries. Indeed, that is what they are, whether they embrace those labels or not. . .
The left will only stop when conservatives stop them, which means conservatives will have to discard outdated and irrelevant notions about “small government.” The government will have to become, in the hands of conservatives, an instrument of renewal in American life — and in some cases, a blunt instrument indeed.
I haven't read the whole thing myself. I'm loathe to go to their site. I read excerpts at this link
https://www.lawyersgunsmoneyblog.com/2022/10/the-radical-right-and-the-coming-of-fascism-to-america
terp said:
Not to mention that Monetary policy has been off the rails for well over a generation now.
A bit like taking stock tips from someone constantly predicting a market crash, no? At some point circumstances will align with the prediction, but I don't know that I'd attribute any special market insight into the person making that prediction.
Inflation currently is real, and is a problem, but a lot of the people talking the loudest about it are perennial inflation hawks, and as such I don't think they're especially worth listening to (double for those who claim that the answer to inflation is to cut taxes). Much of this talk is either political opportunism or ideological axe grinding
PVW said:
A bit like taking stock tips from someone constantly predicting a market crash, no? At some point circumstances will align with the prediction, but I don't know that I'd attribute any special market insight into the person making that prediction.
...
Kinda like those in the 90's predicting a military reaction by Russia because of NATO.
smedley says: "The low estimate of the two [estimates of the effect of demand on this inflation] is 30% which you continue to ignore. Even that number is significant and a lot greater than 0%."
The 70% (or even 40% if you go for 60% as the effect of demand) allocable to supply and "excess" profits is important too, right? Yet only the demand part is being addressed, because raising interest rates is all the Fed can do.
How about addressing the other elements too? Don't know what government can do about supply problems, though probably somebody on MOL or in government could come up with an idea if pressed. Maybe even an idea that would be beneficial going forward. As for profit levels, how about some old-fashioned jawboning/publicity and/or (if only we had a functional legislature!) hearings aimed at restoring and updating enforcement of antitrust laws?
Smedley said:
My "missing the point" is really me not buying in to your crackpot narrative that 8% inflation is fine, np, and the Fed should be sitting on its hands. So yes, I do indeed miss that point.
did anyone here actually write any of that?
It was addressed to one individual poster. If his views are materially different than I characterized, feel free to clarify, which I guess will show that we've been in agreement this whole time.
Smedley said:
It was addressed to one individual poster. If his views are materially different than I characterized, feel free to clarify, which I guess will show that we've been in agreement this whole time.
I never said 8% inflation is fine. I've shown you what I said and you continue to misrepresent it.
As for the Fed - I think they're panicking and their rate hikes so far have done nothing except raise mortgage and credit card rates (there's a real inflation fighter, huh?) and cause market turmoil (tanking your 401K is another real inflation fighter, don't you think?)
I think we'd be way better off if, at the very least, rate hikes had been more measured. Unfortunately I don't think it was politically feasible for the Fed to just sit on their hands, but I think we'd be no worse off if they had.
If inflation does come down because of a Fed initiated recession, the people most hurt by the recession will be the same people that are hurting most from inflation.
Some plan.
Smedley said:
It was addressed to one individual poster. If his views are materially different than I characterized, feel free to clarify, which I guess will show that we've been in agreement this whole time.
I do believe he has clarified, multiple times. "Not a catastrophe" and "not exactly catastrophic" is nowhere near "fine" or "NBD". Things are expensive right now, but we're still using relatively small bills to buy groceries. We're not Italy in the 80s or early 00's Zimbabwe. 8% inflation is significant, but not worthy of the kind of panicky coverage it's getting. If anything, there are quite a few economists who are warning of an upcoming global deflation and the coverage that's getting probably isn't panicky enough.
Not sure if this has already been posted and discussed here, I try to stay out of economic debates as it's not my field of expertise, but I've gifted this article from October 4th. https://www.nytimes.com/2022/10/04/opinion/the-all-too-real-risk-of-a-global-recession.html?unlocked_article_code=QIeiih3DmUuN8nlZB2a6zgAnx_jWEm1rMZ6i-mGZ5AHV2oit0j3QhfM57GN_1ZFmZ8QgAY6oAj13-0ESei0P2Z1D61CaFSQV-fy6gawai3qXlVkBrm9sCtwXp7kbHUaMcOGz7EfuCGlCBTiCaLLU-rweQTnv-HGWJfkkNy_qMBqOc4e6pXuhg-GF_eIk1tHD9bb1a4JuEjdIxfq4QF9SANRRVYKq1cKYhOfQ9EMraEDJ84jGnKvdSEgtDpHYE9MXCix_hlRSNQDhdzu1MQtpS2N4OiNzL8wcTNpCdjEKnXlg9LFYou3o-uEJrddYv2sloxWw7R9GhplcDJ3e6Zww301ED7Kww6f0VVNV9fMrhhxdOqlwEhU&smid=share-url
ridski said:
I try to stay out of economic debates as it's not my field of expertise,
Internet would be a pretty quiet place if that standard was observed...
Well in my book, saying something is "not exactly a catastrophe" is reasonably equivalent to saying it's fine/NBD.
Try saying "that's not exactly a catastrophe" to your spouse / kid / co-worker / friend the next time they tell you bad news and see if they think you're being flip/dismissive of the problem. My guess is that would be yes.
Smedley said:
Well in my book, saying something is "not exactly a catastrophe" is reasonably equivalent to saying it's fine/NBD.
Try saying "that's not exactly a catastrophe" to your spouse / kid / co-worker / friend the next time they tell you bad news and see if they think you're being flip/dismissive of the problem. My guess is that would be yes.
As my daddy used to say...There are more horses **** than there are horses. We just found another one.
Dennis_Seelbach said:
Smedley said:
Well in my book, saying something is "not exactly a catastrophe" is reasonably equivalent to saying it's fine/NBD.
Try saying "that's not exactly a catastrophe" to your spouse / kid / co-worker / friend the next time they tell you bad news and see if they think you're being flip/dismissive of the problem. My guess is that would be yes.
As my daddy used to say...There are more horses **** than there are horses. We just found another one.
You're like an unfunny Statler and Waldorf.
ridski said:
I do believe he has clarified, multiple times. "Not a catastrophe" and "not exactly catastrophic" is nowhere near "fine" or "NBD". Things are expensive right now, but we're still using relatively small bills to buy groceries. We're not Italy in the 80s or early 00's Zimbabwe. 8% inflation is significant, but not worthy of the kind of panicky coverage it's getting. If anything, there are quite a few economists who are warning of an upcoming global deflation and the coverage that's getting probably isn't panicky enough.
Not sure if this has already been posted and discussed here, I try to stay out of economic debates as it's not my field of expertise, but I've gifted this article from October 4th. https://www.nytimes.com/2022/10/04/opinion/the-all-too-real-risk-of-a-global-recession.html?unlocked_article_code=QIeiih3DmUuN8nlZB2a6zgAnx_jWEm1rMZ6i-mGZ5AHV2oit0j3QhfM57GN_1ZFmZ8QgAY6oAj13-0ESei0P2Z1D61CaFSQV-fy6gawai3qXlVkBrm9sCtwXp7kbHUaMcOGz7EfuCGlCBTiCaLLU-rweQTnv-HGWJfkkNy_qMBqOc4e6pXuhg-GF_eIk1tHD9bb1a4JuEjdIxfq4QF9SANRRVYKq1cKYhOfQ9EMraEDJ84jGnKvdSEgtDpHYE9MXCix_hlRSNQDhdzu1MQtpS2N4OiNzL8wcTNpCdjEKnXlg9LFYou3o-uEJrddYv2sloxWw7R9GhplcDJ3e6Zww301ED7Kww6f0VVNV9fMrhhxdOqlwEhU&smid=share-url
a lot of Americans seem to have very little sense of our own country's recent history. Inflation right now isn't even comparable to early 80s U.S. To those of us old enough to remember Reagan's first term in office, 8% inflation isn't a catastrophe. The economy in 1983 was in fact a catastrophe. We had just come out of double-digit inflation, and went into double-digit unemployment as high as 2008-2009.
Saying the current circumstances, with single digit inflation and a strong job market are not catastrophic is just making a pretty well-supported observation. And suggesting that the Fed might be show a little more patience waiting for their rate hikes to have an effect isn't a crazy idea. And none of it is suggesting the 8% inflation is a-ok. It's simply trying to put it in a reasonable perspective.
Smedley said:
Well in my book, saying something is "not exactly a catastrophe" is reasonably equivalent to saying it's fine/NBD.
Try saying "that's not exactly a catastrophe" to your spouse / kid / co-worker / friend the next time they tell you bad news and see if they think you're being flip/dismissive of the problem. My guess is that would be yes.
Is your book called "So What You're Saying Is... Winning Online Arguments Through Strategic Misinterpretation"?
Smedley said:
Well in my book, saying something is "not exactly a catastrophe" is reasonably equivalent to saying it's fine/NBD.
Try saying "that's not exactly a catastrophe" to your spouse / kid / co-worker / friend the next time they tell you bad news and see if they think you're being flip/dismissive of the problem. My guess is that would be yes.
So you treat every bit of bad news as a catastrophe?
I'm sure that's healthy.
Do you know what the word catastrophe even means? It doesn't look like it.
So, a year after the last post, what are people's thoughts on the issue of inflation?
With inflation approaching the target rate and falling, the Fed is apparently weighing whether to start lowering rates.
As I stated way back when, raising rates have had nothing to do with lowering inflation. All they've done is increase borrowing costs, which have increased expenses for certain consumers.
The purpose of raising rates is to decrease demand, which is then supposed to decrease inflation. (even this effect is disputed, according to these smart people.) Anyway, demand has not decreased, yet inflation has dropped.
Kevin Drum, Dave Schmidt's favorite blogger, explains.
drummerboy said:
Kevin Drum, Dave Schmidt's favorite blogger, explains.
My favorite commenter there may be joey5slice. No kidding.
DaveSchmidt said:
drummerboy said:
Kevin Drum, Dave Schmidt's favorite blogger, explains.
My favorite commenter there may be joey5slice. No kidding.
Yeah, that would be your obvious choice, but mr. slice's comments are pretty weak. He claims there is ample evidence of rate hikes affecting inflation, but when asked to provide that evidence fails to do so. Other than saying the Fed raised rates and inflation came down, so therefore... magic!
Drum is right on his main point - raising rates is meant to dampen consumer demand. But consumer demand did not dampen. Slice doesn't even try to address that fact.
drummerboy said:
Drum is right on his main point - raising rates is meant to dampen consumer demand. But consumer demand did not dampen. Slice doesn't even try to address that fact.
Only one can be a favorite, but other commenters noted that consumer demand can rise at a rate that’s dampened from it might have been, so joey didn’t have to.
DaveSchmidt said:
Only one can be a favorite, but other commenters noted that consumer demand can rise at a rate that’s dampened from it might have been, so joey didn’t have to.
Oh, I’m going to have to ask you re-write that sentence, DaveSchmidt.
well, none of us has a crystal ball. And in 2020-2021 the people in government had a choice of whether or not to fight an immediate economic crisis. And they did. You can second guess it now, and we don't have that crystal ball to know what will happen next. But whatever happens from here forward at least we can deal with the economics of it without millions getting sick and a 100,000 people a month dying.