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Does QE Cause Wealth Inequality?

lynalden.com

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Re: Does QE Cause Wealth Inequality?

#101

Post by [deleted] »

trutannus wrote: post #85
vishnugupta wrote: post #9

Earlier quoted context omitted.

Those who typically visit Lyn Alden’s blog and follow her news letter (as well as her target audience) already know what QE stands for. Besides, now a days with fed so much in the news I suspect it’s becoming widely known which is a good thing.

Yes, that makes sense for those in the US, but the FED does not really factor into the thinking of, for instance, a German. The argument of "if you read the blog you know what it means" somewhat falls flat when the link is posted on HN for people who don't already read the blog to see. Quantitative Easing isn't just an American thing, and plenty of Germans might know it as Quantitative Easing, but have never seen it…

[deleted]

Re: Does QE Cause Wealth Inequality?

#102

Post by hammock »

WalterBright wrote: post #98

This reminds me of when after WW2 ended in Germany, the old German Mark was repudiated and became worthless. It was replaced with the new Mark, and every German was given the same number of new Marks to jump start the economy. Within a week, the people who had money before the repudiation had money again, and the people who didn't didn't.

Anywhere to read more about this?

Re: Does QE Cause Wealth Inequality?

#103

Post by Clubber »

whimsicalism wrote: post #89
Clubber wrote: post #72

Earlier quoted context omitted.

It's certainly good for the shareholders to have more money in the market, I'm not sure about the others. I know I'd much rather have a solid 6-7% interest return than a flaky market return.

> I know I'd much rather have a solid 6-7% interest return than a flaky market return. And college debt holders, mortgage holders, generally impoverished people would rather have lower rates on the debt that they have. They'd also rather have jobs, which again comes with more investment. They'd also like to have a higher quality of life, again which comes with more investment in capital/production/real output.

>generally impoverished people would rather have lower rates on the debt that they have.

Generally impoverished people aren't granted lower rates because of the credit system. They typically pay usury rates. Only people with existing assets / collateral get low rates.

>They'd also rather have jobs, which again comes with more investment.

Generally impoverished people have shit jobs, that's why they are generally impoverished. Also, investment leads to automation and offshoring which actually lowers jobs.

>They'd also like to have a higher quality of life, again which comes with more investment in capital/production/real output.

If investment in capital/production/real output helps impoverished people, it's very little. It generally helps already wealthy people.

You're looking at stuff from a textbook macroeconomic position. In the realistic / microeconomic world, things aren't as you are portraying them.

Re: Does QE Cause Wealth Inequality?

#104

Post by Ericson2314 »

throw0101a wrote: post #75
Ericson2314 wrote: post #15

Earlier quoted context omitted.

The mainstream economic theory genuinely believed that handing out central bank securities would work just as well as, say. adjusting a UBI or normal fiscal policy. Yes, it's a suspiciously convenient idiocy --- especially because they also think wealthy households spend less (even if they don't think wealthy bussinesses do something similar) --- so certainly it's not something that can be completely fixed without a…

> The mainstream economic theory genuinely believed that handing out central bank securities would work just as well as, say. adjusting a UBI or normal fiscal policy. [citation needed] "Mainstream economic theory" states, AFAICT, that once the monetary side of things has done what it can, you need to proceed to Step 4, fiscal stimulus: > I would summarize the Keynesian view in terms of four points: > 1. Economies som…

Krugman is the best-sounding stuff of the mainstream. Since that what you brought up, I would start with https://www.crisesnotes.com/paul-krugman-functional-finance-... . Arguable Krugman is so good about not saying terrible stupid shit, that it might come at at cost of not being internally consistent or acknowledging when his views in fact change.

Krugman at least was a "New Keynsian", which is a very complicated confused thing in the way the neoclassical parts and keynesian pieces are mashed together. I mostly subscribe to the Post-Keynesian stuff, which makes a lot more sense to me, and is more embracing of the weird/humanities side of Keynes. https://vebaccount.substack.com/p/the-post-keynesian-worldvi... is a good primer, and really that person's entire corpus is a gem of really good writing. For something that (at least in the last few years) is much more grounded, try http://jwmason.org/the-slack-wire/.

Now you might say that the opposition's views of the mainstream is an unfair place to begin. To that, I say just look at the shit Larry Summers says.

Re: Does QE Cause Wealth Inequality?

#105

Post by dragonwriter »

dageshi wrote: post #11
Ericson2314 wrote: post #6

The thing is we want less stupid speculation and asset bubbles and yet the economy is running far below potential, with the "tight labor markets" right now just a glimpse of how it was before (and probably a fleeting one if the inflation class warriers have their way like in the 1970s). To fix both problems --- because we need to stop just making ourselves poorer and less coordinated with prudish neoliberalism --- we…

I'm still yet to understand how a lot of relatively poorly paid work that probably still needs to be done, gets done under UBI. UBI leads to people not doing particular jobs because sitting at home on UBI with less but enough money is preferable. Which means those jobs have to pay more, which leads to inflation which leads to UBI raising to keep up with inflation... repeat?

> I’m still yet to understand how a lot of relatively poorly paid work that probably still needs to be done, gets done under UBI.

UBI does not exist in a vacuum, it replaces means-tested welfare programs which reduce benefits for additional work. It may also replace or reduce minimum wage, UBI proponents disagree rather strongly over whether it should do this; very broadly those most Left UBI supporters stend to oppose displacing minimum wage and Right Libertarian UBI supporters tend to support it doing so, but that’s not exactly accurate (for instance, I’m a left-leaning UBI supporter, and I support it displacing minimum wage on about a $2000/yr offsets $1/hr of ideal minimum wage basis, so that an early stage, immature UBI would not completely replace minimum wage, but a mature livable UBI would.)

By replacing means tested welfare it reduces worker disincentives to low-paying work, and by reducing/eliminating minimum wage, if it does that, it reduces barriers to work which might be mutually beneficial to employer and employee but not viable given minimum wage.

Enabling work that status quo welfare systems inhibit is a major argument for UBI.

If particular work genuinely needs to get done, inflation will necessarily drive the real value of UBI down while demand drives the real compensation for the work specific work up until the combination causes a sufficiently large number of people to be motivated to do the work in question. The work for which that is not true does not, almost by definition, need to be done.

Re: Does QE Cause Wealth Inequality?

#106

Post by whimsicalism »

Ericson2314 wrote: post #81
xibalba wrote: post #54

Earlier quoted context omitted.

> revolution Revolutions almost always result in prolonged mass violence. Most often of the horrific, needless, and soul shattering kind. A sampling of recent revolutions: the Bolshevik Revolution, the French Revolution, Cambodian civil war/Khmer Rouge takeover, Nazi takeover of Germany, Chinese Communist Revolution, the Cuban Revolution, etc etc. I propose a new heuristic for my fellow HN'ers: if someone pines for r…

Should I do a :D and /s? I obviously don't want more pandemics and bloody revolution --- I am sure I will be the one getting guillotined, for one. The best case --- if it works --- is "non-reformist reform" as the European social democracies were planning. Some Marxists think it was doomed to fail because you can't avoid the antagonisms. I think they were merely prudish about printing money (especially Germans), and…

Immigrants are much more of an underclass in Europe than they are in America.

Re: Does QE Cause Wealth Inequality?

#107

Post by anm89 »

For anyone who is a fan of Lyn, I highly recommend you follow her friend Luke Gromen.

He's been doing some excellent analysis over the last few months and is one of the few people producing this kind of content who can match Lyn's depth and breadth.

One podcast I liked: https://m.youtube.com/watch?v=csf4fdV-EOQ

Re: Does QE Cause Wealth Inequality?

#108

Post by hammock »

indodima wrote: post #76

All in all, this is mostly a question of policy (not in terms of typical market regulation through interest rates, money supply etc.) and not only market mechanisms. Individuals with a high "wealth concentration" have a lot more power to pursue their goals ("gain [more] wealth [concentration], forgetting all but self"). Not only economic power, but -most importantly- power to enforce their interests politically. Most…

Did you read the article? The entire thesis is that monetary policy (what you call "market regulation through interest rates, money supply etc") is not the primary driver of inequality, but rather it's fiscal policy (what you call political interests).

Re: Does QE Cause Wealth Inequality?

#109

Post by trutannus »

dragonwriter wrote: post #93
hammock wrote: post #4

Earlier quoted context omitted.

If you don't already understand what QE in this context is, it is unlikely you will be able to fully understand the rest of this article.

> If you don’t already understand what QE in this context is The title arguably is not sufficient to make completely clear what context is being referenced. (Combined with the source it might be, for those familiar with the source, but that’s beside the point on HN .) I mean “Does Queen Elizabeth cause wealth inequality” is a perfectly valid question, too.

This is my point exactly. The term QE means so many things. Even a person who knows what Quantitative Easing is, might not catch that it means that. My first assumption was that this was some sort of equity investment like Private Equity, often called PE.

Re: Does QE Cause Wealth Inequality?

#110

Post by hammock »

dragonwriter wrote: post #88
trutannus wrote: post #2

The author took way too long to introduce what the abbreviation QE in this context means. It's only in the 5th paragraph. It's generally not a great idea to use an unclear acronym in the title. If you really must, at least do the reader the curtesy of defining it up front, rather than making them dig for it. To someone who's non-American and likely does not keep an eye on the FED, QE isn't likely going to be they way…

> the FED “Fed” ( Fed eral Reserve), not “FED”.

FED (in all caps) is a common way to refer to the Federal Reserve, as is the Fed. Don't ask me why.
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