41–50 of 113 posts
When I first opened the site, I wondered if it was a more technical/wonkish dive, or whether it was a political take. Looking at the root site prospect.org made it clear it's the latter. Don't get me wrong, their thesis can still be right and their fact presented are still valuable, but this is like reading about "is free trade good" in the Economist. I would take away the facts, not the conclusion.
Inflation (money printing) is the cause of increased demand in goods, not the result of supply problems. If the government sends checks of money to people, they will compete for the same amount of produced goods, and realize that they have to spend the money faster if they want it to preserve its value better.
During the Great Recession, a vast increase in the money supply had no apparent impact in inflation. The idea that printing money is a primary driver of inflation may be outdated. I also think you're ignoring the dramatic and unexpected changes in demand (and some constraint in supply) caused by the pandemic.
No it is not
>>During the Great Recession, a vast increase in the money supply had no apparent impact in inflation
Ohh but it did, you just are not looking in the correct market, the money printed in that time was going into institutions, not individuals so the inflation was not in consumer goods but in stocks, real estate and other hard investments
If you look at a chart of stimulus pending over time, and the stock market you see and almost exact parallel.,
COVID spending on the other hand was more direct, with increase unemployment payments, check sent to everyone, child tax credits etc etc etc
This round this more directly impacted the consumer market
Earlier quoted context omitted.
During the Great Recession, a vast increase in the money supply had no apparent impact in inflation. The idea that printing money is a primary driver of inflation may be outdated. I also think you're ignoring the dramatic and unexpected changes in demand (and some constraint in supply) caused by the pandemic.
Please do provide some explanation if you have any. I find it amazing that people have said from the beginning the money printer will cause inflation. When it finally arrives it was "transitory" and now, lo and behold, it's a great concern of the Fed. I still think it was the money printing. People are not scrambling to buy iPhones and factories can't keep up. Everything is more expensive!
A little bit of central planning can go a long way. Nobody was in charge of figuring out how to gracefully shed load at capacity, so when demand went up by 20%, the system overloaded and latency went through the roof. Market fundamentalism (we don't need to plan, the market will do it) obviously screwed up here, but it doesn't follow that everything that the American Prospect hates is actually bad.
This is a great article. Rabbitholed a tiny bit on this part: > Big companies got the law changed to enable ocean carriers to offer secret discounts in exchange for volume guarantees. To an article linked in the first article: https://www.hklaw.com/en/insights/publications/2018/12/congr... > The last amendment to the Shipping Act occurred in 1998 as the Ocean Shipping Reform Act of 1998, following a five-year study o…
I relatively recently read a biography on John D. Rockefeller and this reminds me of some of the things Standard Oil did with rail companies to gain a market advantage. https://en.wikipedia.org/wiki/Standard_Oil#Monopoly_charges_... Rabbithole indeed. Here's notes from a meeting of the HoR Judiciary Committee in 1999, "ANTITRUST ASPECTS OF THE OCEAN SHIPPING REFORM ACT OF 1998": http://commdocs.house.gov/committees/j…
Earlier quoted context omitted.
One could argue that if we actually committed to market fundamentalism it would work, but price-gouging laws prevent the market from addressing this kind of risk.
Raising the prices of what has been stocked won't feed any more people, it'll just guarantee that the wealthiest won't go without. If you're talking about raising demand in order to raise supply, that implies that the virus will react to that and retreat accordingly. Or that regulations will be relaxed. Or that people will be paid enough to show up to work sick.
But making it profitable to be the one with stock on hand in an emergency would encourage holding bigger buffers during the good times.
> Or that regulations will be relaxed. Or that people will be paid enough to show up to work sick.
Or healthy employees will get paid enough where it's worth working double shifts, selling back holiday, delaying retirement... very few people work as hard as they possibly can all the time (and why should they?), if there's truly a desperate need then a correspondingly desperate price can unlock all sorts of capacity.
I appreciate most of the arguments here, but take strong exception to the validity of blaming "just-in-time logistics". Consider grocery store A that uses Just-in-Time and grocery store B that does not: Grocery store A (with JIT) has much less inventory, which has a variety of benefits. It needs fewer square feet, which reduces rent/heating/lighting/cleaning costs and therefore reduces prices; this also means more re…
Where is it written that "efficient" is the be-all-end-all for businesses?
If a business can only extract money but can't serve society when required, perhaps that business should be replaced by something that can?
This is the whole "smoking ban" thing once again. Smokers were so much more profitable that businesses that gave them up simply couldn't compete against those who didn't. At some point, we, as a society, decided that the downsides of such businesses finally outweighed the benefits, and we changed the laws to force those businesses to change.
> Carrying enough inventory to weather a shortage like recent COVID shortages would require months and months of inventory; imagine the obsolescence costs if the factory needs to make any change at all!
However, we also had situations like toilet paper where the factories had capacity in the industrial sector to make toilet paper, but we couldn't transfer that to the consumer sector because every step was so hyper-optimized (rolls are larger, no ability to individually package, only able to ship pallets, etc.).
So, the demand shock rippled through consumer and the supply chain had no ability to adjust upwards because they had no extra capacity. And the industrial chain that had extra capacity was so hyper-optimized that it couldn't pivot to serve the demand shock.
Maximally efficient is minimally robust.
When I first opened the site, I wondered if it was a more technical/wonkish dive, or whether it was a political take. Looking at the root site prospect.org made it clear it's the latter. Don't get me wrong, their thesis can still be right and their fact presented are still valuable, but this is like reading about "is free trade good" in the Economist. I would take away the facts, not the conclusion.
So just pure ad hominem? No reference to the article, just the url?
> Only deviating from free-market fundamentalism—giving everyone health care, for example—could lead to shortages This is true, the symptoms the article is looking at are strong signals of non-free-market policies. Under capitalism, the failure mode is going to be very high prices. If the failure mode isn't high prices then the market probably isn't being run as a free market. Like when there is a crisis and the gove…
Ahh ha, this is like when I say a Scotsman was rude to me and someone else informs me that it must not have been a true Scotsman, then
If there are consistent breadlines, that means someone is giving away a resource at below its value - free markets sort that out very quickly. They turn up for a few days then go away as prices adjust. Persistent problems only crop up when something regulatory is keeping prices down because the seller has huge incentives to raise them until people go away.
I'm not arguing the situation would be rosy, but breadlines just are not how free markets deal with the situation. Markets use price signals to allocate, not long queues. Not a controversial fact, although people do sometimes get very unhappy about it.
There's nothing in this article that I haven't read elsewhere. But it still only gets things half right. Sure, outsourcing and offshoring to China caused supply shocks for things from Asia, but...potatoes? cooking oil? These things are not shipped from China. There's more going on than international problems. America has plenty internal supply chain problems, too. The causes might be similar, smaller scale, intra-nat…
With the amount of consolidation we currently have, you can't switch to a vendor that does not do this as the easiest way to rise to senior management is to do this.
Probably the most comprehensive way to fix this is to tie a significant portion of managements compensation to how well the company does over 20 years. You would also have to make it so if you have a significant stake in a company, you can only exit that stake over a 20 year period to keep shareholders/VCs from forcing the company to have a few amazing paper quarters so they can exit big before the company implodes.
I don't see this happening though, and it would be hard to keep existing players from adding loopholes (eg: 'loaning' their holdings out) that remove their accountability.