61–70 of 99 posts
You can make inflation say whatever you want it to say with selected goods and index weighting, so I don't get into arguments about it because it's mainly an obfuscation proxy for ideological conflicts.
Supposedly the total M2 in the US was around $15T last year. The Federal Reserve dumped $4T more (or 26%) into the economy, bringing us up to $19T. How does this not impact inflation? If you have more dollars representing the same real value, doesn’t that make each dollar worth less of it?
Ask Japan. Their M1/2 has growth bigly over the last few decades and they've had next no inflation. Remember, the 'general' equation is: Inflation = Money_supply x Velocity.
Yes, there's a big tank of money sitting around, but it's not sloshing around the economy that much. And if it does start, there's at least one tool to cool things down: raise interest rates.
I think the author is confused about what inflation is, vs the benefits reaped from the advancement of technology. The author also seems to have a bias against the people screaming "inflation". That is pretty obvious from the title. To show real inflation, I like using the Burger King whopper as an example. In the early 90's I remember being able to buy 4 whoppers for $1. With the advancement of farming technology, t…
> In the early 90's I remember being able to buy 4 whoppers for $1. The simple answer is that your memory is wrong, and that at no point in the 1990's were you able to buy 4 Burger King Whoppers for $1. Other than your recollection, do you have any evidence that this price is correct? Or have I missed a layer of hyperbole in your argument?
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Essential? Really? Many of us leave our phones off, leave them at home or in the car, and are only marginally impacted. The difference between 'any phone' and a smart phone is quite small. Except for folks addicted to them, who can't last a day without constant updates.
Many people don't have a computer. Their smart phone is also their computer. There's myriad services in modern western life which require a computer of some sort to access. Increasingly government services, banks, transport, event ticketing etc are operating in an online-first way. How do you access those services without a computer?
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Essential? Really? Many of us leave our phones off, leave them at home or in the car, and are only marginally impacted. The difference between 'any phone' and a smart phone is quite small. Except for folks addicted to them, who can't last a day without constant updates.
It's more essential the poorer you are. Because what's truly essential is Web access - for communicating with your friends and family, for access to government services and banking, and bunch of other little things you may need to do to secure a job, etc. Most of these things you can do even better on a computer - if you own one . A smartphone is the cheapest personal device with full-featured Web access these days,…
Supposedly the total M2 in the US was around $15T last year. The Federal Reserve dumped $4T more (or 26%) into the economy, bringing us up to $19T. How does this not impact inflation? If you have more dollars representing the same real value, doesn’t that make each dollar worth less of it?
Strictly speaking, inflation is defined by price/quality of baskets of goods, not by a measure like M2.
He's being a big of a dullard here in that he's ignoring how inflation (or the expectation of inflation) can affect interest rates and how that can clobber asset prices.
Based on recent sales, our house has been appraised in the low $700,000 range for the last few years. We just put it up for sale and received three offers. $1,025,000, $1,030,000, and $1,050,000. I’d say something is going on with home prices.
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The thing he's arguing against is the Chicago/Austrian school of economics, whose response to just about every monetary policy measure is "But inflation!" UBI would cause inflation; raising the minimum wage would cause inflation; worker protections would cause inflation; government borrowing causes inflation. That kind of economics gained popularity in the 1970s, when inflation caused genuine hardship. It left a kind…
> especially among people who have money, because inflation erodes the value of savings. What? Wealthy people don't buy CDs. They tend to invest heavily in assets. Often, these are leveraged assets like real estate or equities in a margin account. NOTHING makes the rich richer like inflation. Reducing the burden of low-interest mortgage or margin debt whilst boosting earnings in equities. Meanwhile, the poor still pa…
Actual Chicago economics arguments are much better than the ones you hear on the Internet. I think they're still pretty bad, but not as bad as the parodies based on first-half-of-the-first-semester Econ 101. HN in particular is often full of that kind of argument, because it attracts a demographic of exactly that top 20% who have lots of assets but enough in cash-equivalents -- or imagine they will some day real soon.
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I find it interesting to look at this graph against Maslow's hierarchy of needs. First layer, shelter and food, have increased almost perfectly in line with wages. That's reasonable. Second layer, security - including healthcare in the US - "feels like it’s experienced hyperinflation", according to the author. And, as you age, your healthcare needs increase. So if you're low in this hierarchy, being relatively poor,…
You can also make almost the opposite point. We used to spend a lot on basic needs like food and shelter, 3/4 of the average income on food, and more money on bread alone than on housing (IIRC, 19thC rich countries). As growth/technology made these cheaper, or if you prefer, made us so rich that they can be had for a tiny fraction of our income, we spend it on other things. Many of these are status competitions -- it…
> [Since 2001], in-state tuition and fees at public National Universities have grown the most, increasing 212%.
while
> The total consumer price index inflation increased by around 50% from August 2000 to August 2020, according to the U.S. Bureau of Labor Statistics.
1: https://www.usnews.com/education/best-colleges/paying-for-co...