501–510 of 593 posts
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The piecemeal approach ensures they avoid massive shocks and over-correction. The cure should not be worse than the disease.
Or rather, it ensures they avoid a one-off under-correction. One big rate hike will be forgotten quickly and worked around. Inflation is a beast that needs long-term trends, not one-off actions.
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I generally agree with all of this, though, i think two of the points may see counter-intuitive outcomes: >* Housing bubble. Near zero central bank/bank interest rates has inflated a housing bubble. Higher interest rates will decrease housing prices since fewer buyers will be able to afford higher interest mortages. Ehh... we should expect this, but supply may meet demand, instead of the other way around. We could se…
“ We could see an unprecedented ramp down in the already unprecedentedly low inventory.” What do you mean by this?
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> If those are the principal drivers of inflation, tightening could depress non-energy demand in a way that causes a recession without alleviating inflation You don't think the inflation has anything to do with printing $14 trillion out of thin air, or increasing the M1 money supply from ~4tn in march 2020 to over $20tn today? https://www.covidmoneytracker.org/ https://fred.stlouisfed.org/series/M1SL
No, because they did basically the same thing ~15 years ago without increasing inflation. Year over year inflation is higher than it’s been in 40 years, and they weren’t printing money then either.
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Speaking of lower middle class and poor people. Powell recently stated that workers had too much power and were able to demand too much higher wages. He intended to create policy to tip the balance of power away from workers to resolve this. I don't believe the well-being of lower middle class and poor people are a concern of his. https://www.wsj.com/articles/transcript-fed-chief-powells-po...
Yup. The last few years have also seen some of the highest wage growth in decades, and highest saving rates across the board. All that pent up demand and broadly distributed spending power is fueling inflation now. But, in the balance of things, labor did really well. It's capital that being severely punished now, with negative returns (on top of inflation), it will take years to recoup losses. Anybody hoping of beco…
This kind of thing really bothers me, and the more I learn about economics the more I understand why public school economics classes are so poor. If people understood this stuff there'd be a revolution.
I think Warren Buffet once said something to the effect of if the average citizen understood how the federal reserve worked there'd be a revolution overnight. I'm sure I got the person or details of the quote wrong, but I'm too lazy to look it up. Regardless, the sentiment stands.
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What's the good play here? Cause a recession or price those lower middle class out of being able to afford the cost of living? Typically they aren't the ones with the best negotiating power.
I don't see why people think inflation hits the bottom of the wealth distribution the most. If you own your home but make the minimum payments, inflation is good. Your payments stay the same but the dollars are worth less, and hopefully your wages go up (as many people's have been). If you owe student debt, healthcare debt, same thing. Almost every lower middle class person has one of these kinds of debt. Inflation h…
A huge swath of Americans are living paycheck to paycheck and can't afford a $500 emergency. As inflation increases the cost of goods and services those people have even less wiggle room to handle the unexpected and/or they need to start cutting back on expenses.
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This comment is too simplistic, but I have noticed this scenario playing out with a lot of the younger people I work with. We have a remote org and hire remote, but a lot of the young people we hire out of college have relocated to some of the most expensive cities. There’s a growing attitude that if they’re already paying exorbitant amounts for housing and have a large amount of student debt, why not go all-in and b…
I work remote and the thing that keeps me living in a relatively high CoL city is fear of being locked in if I'm fired and unable to find other remote work. Getting a mortgage in the country, for a tech worker, is basically a bet that either home values will stay high enough you can back out or that you'll be able to stay remote for the length of the mortgage.
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If that's the case, why not just rent?
You'll never finish paying rent, but you will finish paying your mortgage eventually. Also, your mortgage payment won't increase much while you own your house (just the part for property taxes), while rents will often go up (and sometimes down) with the market. So if you are in it for the long term, a house will provide stability after 10 or so years. And that isn't even considering the fact that it is your place to…
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Last budget and tax cut was 2017.the real solution is to tax wxcess wealth and force wealth creators to pay for society
Wealth creators already do pay for society. Where do you think most of the tax money comes from? The top 1% of taxpayers pay almost half the taxes.
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The railway heyday in the US was famous for this, extremely high wages at the time, but company town, company store, and miles and miles from anywhere. Few were able to come out the other end much better off. You load 16 tons, what do you get? Another day older and deeper in debt St. Peter, don't you call me 'cause I can't go I owe my soul to the company store
Coal also. Lead to things like Blair mountain[0], where poison gas bombs from WWI were dropped on American workers, in America. There's four boxes. [0] https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain
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Hmmm, Moody's where do I remember that name from? Oh ya here it is - https://www.theguardian.com/business/2017/jan/14/moodys-864m... Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes.
> Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes. Why does nonsense like this get parroted so much? Economics is as much a science as any other social science. Which is to say that it's certainly imperfect and is subject to social problems surrounding science (e.g. the replication crisis), but it's sti…
Social sciences is a complete misnomer. It should be social theories, there's zero scientific basis for them.
You can't compare the science of the physics of the universe to gender studies and economics. One studies the laws of the universe, the other simply talks about an irrational thing irrational beings created, and pretends its science.