161–170 of 593 posts
Earlier quoted context omitted.
please show where trickle down economics ever worked, anywhere.
An iPhone user in rural India surfing the open internet on $1 / month LTE mobile networks is absolutely an example of Trickle down economics working. Every single of the thousands of innovation that goes into an iPhone was subsidized by rich venture capitalists and rich early adopters who were willing to plonk large sums of money to a 'gadget' that only showed promises of work. It wasn't because the Indian Government…
Don't forget the governments which helped fund the basic research used to make such things, the middle and lower classes that pay more in property taxes so companies can be bribed to build factories, and other such things.
Put another way it's a much more complicated picture than just those two.
Stocks rallying a bit. I expect we'll see dead cat bouncing at least until we get the next CPI numbers.
Stocks rallying is just an indication that the Fed under-raised compared to market expectations.
Ridiculous that the Fed doesn't just raise 200bp and be done. They could have done this six months ago (call it 250bp then) if they truly believe that the level of interest rates will have a material effect on the inflation rate. The piece meal, drip drip increases just raises uncertainty for consumers and businesses while ensuring they are "behind the curve"
Think of an economics equilibrium as a guitar string. The harder you pluck it (shock) the longer if vibrates back and forth before reaching equilibrium. Plucking it softer but more often, keeps the string closer to equilibrium across the entire time horizon.
This also applies to things like minimum wage increases.
Earlier quoted context omitted.
The piecemeal approach ensures they avoid massive shocks and over-correction. The cure should not be worse than the disease.
that happened.
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When America shuts down or reduces its own oil supply, those holding the rest of the world's supply get more leverage.
We reduced our oil production before the invasion. Gas prices were multiplying before the invasion. Putin did not force the reduction of our own supply. The current administration did. The invasion may have been the consequence of the reduction of our production and amplified the "price hikes", but it wasn't the cause of the "price hikes", the initial action of reducing production and relying on foreign imports was.
"At the beginning of 2021, 129 refineries were either operating or idle in the United States (excluding U.S. territories), down from 135 operable refineries listed at the beginning of 2020. The additional refinery closures in the 2021 Refinery Capacity Report largely reflect the impact of responses to COVID-19 on the U.S. refining sector."
Claims below that leases reduced production is a canard. It takes years to develop a lease. In 3 or 4 years you could blame Biden, but unless Exxon produces by time machines it has nothing to do with production issues in 2021. Domestic oil producers are sitting on 1000's of leases.
You can argue either side to this, and make a good case. My personal preference is to trigger a recession and reduce inflation. The easy cop-out solution is to say a "big f*ck off" to pensioners, lower middle class, and poor people and let inflation soar, but I believe that long term this would be more destructive to the general economy. Better take the long term view here and not kick the can down the street.
I just wish it was done earlier and more cheaply during otherwise good times.
This isn't just hindsight bias either. Plenty of people have been warning about exactly this problem for years.
This is a typical overcorrection (the Fed is run by humans after all). US debt is over $23x10^12, so such rates are unsustainable even in the short term (12-24 months). Algorithmic Monetary Policy > Dictated Monetary Policy(TM) IMHO.
You can argue either side to this, and make a good case. My personal preference is to trigger a recession and reduce inflation. The easy cop-out solution is to say a "big f*ck off" to pensioners, lower middle class, and poor people and let inflation soar, but I believe that long term this would be more destructive to the general economy. Better take the long term view here and not kick the can down the street.
Are US pensions not tied to the CPI or some other inflation measure? (In Germany, pensions are, in principle, tied to the development of wages, which are generally assumed to outpace inflation.)
The really worrying thing to me is our inability to accept that we (as in humankind) are rather rubbish at running complex systems. A good analogy is to think of the economy as a still lake. If you throw a rock into it, you know that it will create concentric circles of waves. You throw a second rock and you know that its waves will interfere with the first. But now the waves create oscillating patterns and now they…
They are also doing everything at a pretty high level where you don't need to be able to predict economic events with 100% accuracy. You can know that throwing a 50lb rock in the lake will likely cause a bigger wave to come up on shore (regardless of other rocks being thrown) without being able to fully characterize and predict the timing of it.
5-year plans from centralized sources seem to struggle to even survive for 5 years, whereas the current system in the US has been generally functioning well for over 100. I'm not convinced they're as similar as you think.