401–410 of 593 posts
I know this may sound petty and the wording is regularly found even in the best editorial offices, but the engineer in me resists every time: the correct wording should be "by 0.75%-points" instead of "by 0.75%". Am I the only one who is bothered by this?
No, it should either be 0.75% or 75 basis points
Savings are low. We have supply issues -- just not enough stuff, including food, even if you had all the money in the world. It is a joke now that people complained about babyfood and government said it will give money; only to get a reply of: no there just isn't any baby food delivered. Increasing rates will likely have the opposite result. The goal of the Fed is to break the backs of people with low means. I am not…
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I don't follow your parallelism. But yeah, you'd probably have to raise taxes to climb out of the hole we've dug. Or you could go for MMT (sticking your head in the hole.)
The problem with your comment is that raising taxes is MMT. Sticking your head in the hole is what neo classical economics does.
You might raise taxes to for current monetary reasons under MMT, but you wouldn't do it because debt service costs were too high for it to be attractive to issue debt in the amount your desired spending exceeded revenue before the tax increase, because you would recognize that there is no need to “borrow” money that you yourself issue. You would spend what you spend and tax what you tax and if you want to undertake future commitments for some stabilizing purpose you do that, to, but none of those things depend on or fund the others when you are working in your own fiat. That's the myth of the fisc, which is produced when a fiat-issuing government acts as if the currency is an external commodity.
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> personal preference is to trigger a recession and reduce inflation These aren't binary outcomes. Tight money does nothing to ease supply-side bottlenecks. It does little to target demand displaced by rising energy prices. If those are the principal drivers of inflation, tightening could depress non-energy demand in a way that causes a recession without alleviating inflation. Stagflation. (To be clear, we're not at…
That's my fear. In other words, increasing interest rates may not address the cause of the current inflation, so now instead of one problem (inflation) we have two (inflation + recession, aka stagflation).
The public are worried about inflation, it's the issue of the day. They will cut back spending until inflation is seen to be tackled which will likely bring about a recession anyway.
Given that, the Fed's hand has been forced, if they do not seem to be aggressively trying to deal with inflation the public will become even more scared and reluctant to spend.
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Inflation is largely being driven by import problems and oil prices, therefore, it is unclear if a recession is a golden key to lower inflation. Keep in mind that oil is internationally expensive, and even a reduction in the US may not bring down prices significantly . So we could see recession AND inflation at the same time. Then tack on higher interest rates, and everything goes squish.
The Fed can only manage monetary policy. If Congress wants to fix the petroleum energy crisis with policy, it has the tools to do so.
- reduce speed limits, like in the 70s. Actually enforce with speed cameras everywhere (bonus, fewer people will die). - mpg mandates for new vehicles, like Obama, but now also include light trucks. (bonus, fewer people will die).
The fact that they are not even being discussed by policymakers in this context of high gas prices tells you that driving fast with large vehicles is fetishized.
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 don't think it's that simple. Lower middle class and poor people have debt, and inflation is good for making debt less valuable in real dollars. Pensioners, maybe, but social security is indexed to inflation if I'm not mistaken? I wouldn't be surprised if many public and private pensions are as well. This is much more a move in favor of the rich that are owed money by the poor imo.
Inflation affects the poor much more than it does the rich, which is why it's considered a "regressive tax". The Fed making a historically large rate hike is a direct attempt at fighting inflation, preferentially so over preventing a recession.
And since we're already very near to full employment, the risk that inflation poses to the poor is greater than that of unemployement, hence why it is better for the poor that inflation is brought in check even at the risk of recession.
> Seniors, should reap the benefits of higher bank savings rates after years of piddling returns. Not to any significant degree. Bank rates won't come close to offsetting the effect of inflation. The big winner will be the IRS, as intended. .
How does IRS win here?
Then the IRS says that the 10% is income, and taxes me on that. They make more than they did when I was getting 1.5% on my money.
I know this may sound petty and the wording is regularly found even in the best editorial offices, but the engineer in me resists every time: the correct wording should be "by 0.75%-points" instead of "by 0.75%". Am I the only one who is bothered by this?
No, it should either be 0.75% or 75 basis points
Earlier quoted context omitted.
Disagree. We’re already past peak combustion vehicle sales per Bloomberg NEF, and the rate of EV sales will only increase based on operating costs versus combustion vehicles. Lots of folks interested in EVs when fuel is $5-6/gallon, which will remain for some time. Gotta scale up faster, build the machine that builds the machine and whatnot. https://e360.yale.edu/digest/new-analysis-suggests-we-have-p... https://abou…
I think you're underestimating the long tail, the average age of a vehicle is 12.2 years old, we're probably 15-20 years from where 50% of vehicles on the road are electric. I'm 39, and I do not see a point in my expected lifetime (around another 35 years) where gasoline and diesel fuel will not be common and available.
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High gas prices are mostly a function of insufficient refining capacity, short of the government building more, I dont see a policy fix here. The market is responding to the probability of an electric future.
Where is all this new demand for gasoline coming from? I know a lot of people are back to in-person work and school, but a substantial number of people are now full or part-time WFH where they weren't before 2020. On top of that we've "unexpectedly" lost over a million people in that same time frame. Shouldn't demand for gasoline be lower than it was before the pandemic?