Four Basic Truths of Macroeconomics

You've stated a bunch of stuff as fact without sources.

> Yes, exactly. This allows wealthy people to borrow money and pay it back with less value.

It lets everyone do so, and as a fraction of net worth, the poor are way disproportionately exposed, and hence benefit. A billionaire with $1B in net worth isn't leveraged to 10B in real estate. Someone worth $10K may easily have $100K in mortgage debt, however.

Why do you say people who have both debt and assets benefit more than those who have just debts? They strictly dont because those assets have to outperform inflation. Debts do not.

> Poor people often don’t have access to these extremely low interest rates because of structural inequalities and credit requirements (and exceptions tend to leave them worse off as well, see the subprime fiasco). Meanwhile the cheap credit bids up the prices of those assets, benefitting the people who have them (wealthy) as opposed to the people buying them (upwardly mobile or aspirational).

That's irrelevant - that is to say, a separate problem - because inflation affects everyone regardless of interest rate equally. Interest rates are set based on likelihood of default.

> Not in aggregate, because the cost of a house increases as people bid for houses with the cheap credit.

Yes, in aggregate, no the cost of houses hasn't increased on an inflation adjusted dollars per square foot basis since the 1970s [1]. Where it has increased on a unit basis it's due to zoning regulation and not inflation.

> Right, and at the end of the day those units represent less value because of the actions of the central bank. Furthermore those actions were intended to have that exact effect. So how are you claiming that business owners are supposed to work in opposition to central bank policy? Clearly if the central bank wants wages to decrease in real terms, and business owners increase them nominally to make them neutral in real terms, this frustrates central bank policy and they will logically just print more money.

No, this is a fundamental misunderstanding. All businesses see their expenses and revenues rise with inflation. If they choose not to adjust their salaries commensurately, they've made a conscious decision to reduce pay a fraction of income.

> The problem is the distorting effect of low interest rates means that what is productive in terms of nominal r.o.i. is not what is productive in real terms, but the market distortions are so pervasive and persistent that people have to chase the nominal returns. This is incredibly destructive to value, society, and community.

[citation needed]

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

yes, comrade, you have nothing to lose but your chains

> people who benefit most have both assets and debt. These are wealthy people

Generally you have to have more assets than debt to be considered "wealthy." This is why the word "net" is important in the parent comment. And you are completely ignoring the second-order effects, which is that an economy with low, stable inflation is good for everyone. And if you are going to quibble "why is low, stable inflation good for everyone," then look at the deflationary spirals of the great depression (or any pre-1900 crash) and any hyperinflationary economy of your choosing.

> If demand decreases then production should decrease

Okay Chairman, have it your way. COVID hits, demand plummets, we do nothing to try to keep people in jobs or keep the financial system from collapsing. Less production is indicated!

> buggy whips

This is a total red herring and you know it. No one is talking about counter-cyclical monetary policy and implying it is being used to keep anachronistic firms in business.

To be fair it's not a real Nobel prize. It's paid for by a bank and it was first issued in 1968. One of Nobel's descendants is on record speculating that Nobel would never have agreed to the award. It's very much about public relations for the field of economics. The field's effect on the world has been to undermine democratic governments through the establishment of treaties that people never voted for and organizations comprised of people who were never elected. Governments merely act as middle managers to the "market" and their role is to keep their people within the constraints of these supposed universal truths. The Nobel Memorial Prize in Economics Science is a way for the field to convey prestige, expertise, and authority.

My personal take is that the field is stuck in an existential local minima and are self-conscious about it: similar to how astronomy was stuck on the model of concentric spheres. I think everybody who practices the field is unconsciously aware of it too which is why they lean on hand-waving charts and opaque math that anybody in a harder science would instinctively call bullshit on. How psychology got to be the poster boy for the replication crisis in the social sciences and not economics is baffling given the scope and depth of influence the field has had on the world.

But don't take my word for it... https://academic.oup.com/ej/article-abstract/127/605/F236/50...

  We investigate two critical dimensions of the credibility of empirical economics research: statistical power and bias. We survey 159 empirical economics literatures that draw upon 64,076 estimates of economic parameters reported in more than 6,700 empirical studies. Half of the research areas have nearly 90% of their results under‐powered. The median statistical power is 18%, or less. A simple weighted average of those reported results that are adequately powered (power ≥ 80%) reveals that nearly 80% of the reported effects in these empirical economics literatures are exaggerated; typically, by a factor of two and with one‐third inflated by a factor of four or more.

> When assets go up relative to currency, fewer buyers can compete for those assets, leading to the wealthy owning more and the poor getting poorer.

Boy are you going to freak out when you learn about stock splits and fractional share investing.