Have we been thinking about inflation all wrong?
thewalrus.ca
Have we been thinking about inflation all wrong?
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Re: Have we been thinking about inflation all wrong?
#2Sure, let's whitewash the current administration's total failure and rebrand as a success.
Re: Have we been thinking about inflation all wrong?
#3The basic assumption here is that inflation reduces inequality. That's plausible (it certainly was a strong contributing factor to the great reductions in inequality that occurred between 1920 and 1950). But inflation is also an extremely blunt-force instrument: lots of people who aren't very wealthy also get hurt. I'm not sure why we'd want that in a world where fiscal policy (i.e., taxation) exists, unless we've just thrown up our hands and abdicated all responsibility about what kind of society we want to live in to unelected Central Banks.
Re: Have we been thinking about inflation all wrong?
#4Have We Been Thinking about Inflation All Wrong?
The answer is almost certainly "yes" because the economy is complex and you can't really distill it into a single number that gives a clear signal for "good" or "bad". Skew in the price of individual goods (like luxury cars, or food staples) can make the inflation number out of sync with the impact on average people.
Re: Have we been thinking about inflation all wrong?
#5It's telling that the vast majority of the pushback on the 'inflation is bad' viewpoint comes from well-off academics, tech folks, and just generally people who are hurt the least by inflation.
Re: Have we been thinking about inflation all wrong?
#6Have We Been Thinking about Inflation All Wrong? The answer is almost certainly "yes" because the economy is complex and you can't really distill it into a single number that gives a clear signal for "good" or "bad". Skew in the price of individual goods (like luxury cars, or food staples) can make the inflation number out of sync with the impact on average people.
Don't tell the 80s that!
Re: Have we been thinking about inflation all wrong?
#7The basic assumption here is that inflation reduces inequality. That's plausible (it certainly was a strong contributing factor to the great reductions in inequality that occurred between 1920 and 1950). But inflation is also an extremely blunt-force instrument: lots of people who aren't very wealthy also get hurt. I'm not sure why we'd want that in a world where fiscal policy (i.e., taxation) exists, unless we've ju…
If anything it increases inequality. It hurts the poor the most. The wealthy are more immune because they will have their wealth in things that go up with inflation. When it is caused by the government spending more than it takes in, it is effectively a hidden tax. NONE of these things are new concepts. Even the belief that the inflation won't hurt is new. Many other societies have blindly thought they were immune until they were not.
Re: Have we been thinking about inflation all wrong?
#8Sure, let's whitewash the current administration's total failure and rebrand as a success.
I think there are decades of bad policy stacked on top of each other that are responsible for the current mess.
Re: Have we been thinking about inflation all wrong?
#9Inflation washes out debt. Who think inflation is good? People, companies or institutions that are buried in debt to the tits. For the rest of us it is just an extra hand inside our pockets.
Re: Have we been thinking about inflation all wrong?
#10Inflation washes out debt. Who think inflation is good? People, companies or institutions that are buried in debt to the tits. For the rest of us it is just an extra hand inside our pockets.
Inflation washes out debt as long as wages are rising with inflation. If they're not it's just crushing us all.