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The anti-inflation pivot of 2022

adamtooze.substack.com

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Re: The anti-inflation pivot of 2022

#221

Post by spookthesunset »

ketralnis wrote: post #169
spookthesunset wrote: post #120

Earlier quoted context omitted.

> rumors of the end of the pandemic are greatly exaggerated. Only if people are stupid enough to repeat the last two years of nonsense. Take away all the fear mongering and testing and you probably wouldn't even notice covid was a thing. You'd get sick like you always do and just shrug it off as "that thing that was going around" like we all did in 2019...

This is the problem of mostly successfully preventing fires or preparing for floods. "It wasn't that bad" because it was handled, but since that was handled by somebody else it's invisible to you

“If we did it right you’ll never even notice we did a thing” also happens to be an excellent way for any sleazy politician or “expert” to deflect any questioning.

Re: The anti-inflation pivot of 2022

#222

Post by spookthesunset »

groby_b wrote: post #171
conductr wrote: post #164

Earlier quoted context omitted.

Not that I like it but, I happen to think it's just a new normal as well and if everyone starts behaving as if it's normal then the impact on global economics when compared to a similar period should be rather normal. Continuing lockdowns and other things that impact supply chains/production are examples of behaving like it's not normal. They will likely continue to some degree despite my opinions.

Neither deaths nor disability can be wished away by "just behaving as if it's normal". As for "continuing lockdowns" - most of the western world hasn't had a single actual lockdown. So let's not pretend that's the issue, or a desired approach to the problem. What is needed is - data transparency, instead of reduced data collection. - targeted measures, instead of blanket measures. Utilizing the above data, and focusi…

You are right. Forcing “non essential” small businesses to close, stopping all events, closing churches, parks, playgrounds, schools, making it illegal to walk on “the dry part of the sand”, disallowing dying people to have visitors, forcing hospitals to stop taking elective surgery, arresting people sitting on benches,etc… these all just ordinary things… right? Definitely not a “lockdown”, right?

What is a lockdown if that isn’t? And how come those “real lockdown” places still have Covid? Or did they not “lockdown” hard enough either? I’m very confused here.

Re: The anti-inflation pivot of 2022

#223

Post by tel »

kansface wrote: post #108
visiblink wrote: post #103

Earlier quoted context omitted.

Canadian mortgages have separate amortization periods (say 20 or 25 years for example) and interest rate terms (generally 1-5 years, after which the rate has to be renegotiated -- and you have the option of transferring the mortgage to another lender at that time). You can also let your rate float with the market, which is called a variable rate mortgage.

Interesting. Do you know why mortgages in Canada are so different from the US? They seem much more risky on the buyer’s side.

The USG massively subsidizes home ownership. The burden is passed down to taxpayers, but also may cause a drag on the global economy due to lopsided interest rate hedging.

Re: The anti-inflation pivot of 2022

#224

Post by colinmhayes »

csours wrote: post #99
t_mann wrote: post #80

Earlier quoted context omitted.

The fields are macroeconomics and labor economics. I don't understand your other question, so it's hard to answer. What do you mean by "discovered"? Discovered by whom, the employer or the the employee? But you may be interested in knowing that models of labor markets are often based on matching models - you've got two groups (employers, employees) and everyobdy is trying to find {one,many} members of the other group…

> The fields are macroeconomics and labor economics As I understand it, those are mainly concerned with reduction in labor costs. Job discovery is a phrase used by Clayton Christensen to describe finding a job to be done. He uses it to describe finding a product to sell to people to perform some function in their lives - a job to be done by a product that you make. I'm using it as an alternative to the idea of "job c…

Did Zuckerberg discover all the jobs that Facebook has? I think it’s a bit silly to frame it that way. I’m not going to say he created them either though, but he definitely contributed to the creation of all those jobs.

Your understanding of what economics is interested in is also incorrect. I guess business programs are concerned with reduction of labor costs. Economics is concerned with efficiently allocating scarce resources.

Re: The anti-inflation pivot of 2022

#225

Post by thaumasiotes »

vorpalhex wrote: post #156
thaumasiotes wrote: post #119

Earlier quoted context omitted.

The mathematicians don't need any more food than they did before the new kind of math was discovered. Why would you count that as job creation?

Having food is not the hard part, the logistics of food is the hard part. Feeding one person is easy. Feeding 200 people with a mix of allergies is hard.

On the other hand, when you're already feeding 4000 people, feeding 4200 people is not noticeably harder.

Re: The anti-inflation pivot of 2022

#226

Post by colinmhayes »

gizmo686 wrote: post #193
mlsu wrote: post #187

I heard a while back the idea that interest rates are a proxy for stability. That more stable societies support low interest rates, because in a stable society, money is more likely to be paid back 1, 5, or 10 years from now. Does the sharp rise of interest rates in the past year indicate that we are existing a period of prolonged stability and entering a period of relative instability?

That assumes interests rates are set by the free market, which is not true in todays economy. The reason interest rates are going up is not a mystery. A dozen people meet semi-quarterly and vote on what the interest rate should be.

I’m not sure your point contradicts the hypothesis though. Stability is the whole point of macroeconomic policy, and central bankers instituting a high interest rate is absolutely a sign that they believe some instability is coming.

Re: The anti-inflation pivot of 2022

#227

Post by nostromo »

mlsu wrote: post #187

I heard a while back the idea that interest rates are a proxy for stability. That more stable societies support low interest rates, because in a stable society, money is more likely to be paid back 1, 5, or 10 years from now. Does the sharp rise of interest rates in the past year indicate that we are existing a period of prolonged stability and entering a period of relative instability?

Did the US become more stable during Covid or during the financial crisis? No - quite the opposite.

Re: The anti-inflation pivot of 2022

#228

Post by AnimalMuppet »

A4ET8a8uTh0 wrote: post #197
AnimalMuppet wrote: post #163

Earlier quoted context omitted.

> And now policy makers are openly discussing saying "Lets crash the economy so that companies can keep their leverage." Where have you seen policy makers openly discussing this? So far, it hasn't been open enough for me to see it...

You don't have to search that far. I think the only reasonable objection here is whether individuals listed below could be considered policy makers, but the pattern seems relatively clear to me. Note that economy is weirdly connected to how a person feels. Just hearing that recession is just around the corner could potentially set it off ( not completely unlike say.. shortage after hearing something is about to be no…

> If you follow Powell's original comments that raise all that recent ire, you could see how those could be easily construed as "Lets crash the economy"

Sure, I can see how it can be construed that way. I think a broader reading of what Powell is saying would lead you to "let's bring inflation under control, even though it means crashing the economy". That's quite different from "Lets crash the economy so that companies can keep their leverage."

I think the Powell comments you quote later indicate that he'd prefer to get inflation under control without crashing the economy, if possible.

The comments from business leaders don't impress me. Of course they want businesses to go back to having the leverage.

Re: The anti-inflation pivot of 2022

#229

Post by mensetmanusman »

spywaregorilla wrote: post #166
bryanlarsen wrote: post #136

Earlier quoted context omitted.

Wouldn't that be great? America can't seem to function without a bogeyman. The world would be so much a better place if the bogeyman was a democracy like India instead of China or Russia. Shift that Overton window!

My comment largely comes from India looking more authoritarian by the day, not to mention playing both sides of the Ukraine invasion.

They are behaving as expected since they are beholden to Russia for military equipment.

Re: The anti-inflation pivot of 2022

#230

Post by edgyquant »

unholiness wrote: post #219
mjburgess wrote: post #7

This article appears to take place in a universe where interest rates at central banks are at counter-inflationary levels. They've been inflationary for a decade, and continue to be so. With inflation at 10%, fears about "going too far with interest rates" make sense only *at least* north of 5%, and realistically, 8%.

Macroeconomics novice here. What's the argument that interest rates need to be close to inflation rates to counteract it? It seems like there should be an intrinsic time-value of money (e.g. 1 stuff today is worth 1.05 stuff next year) which is tradable (supply of future-stuff will equal demand for future-stuff at some rate like 1.05). And that single rate of stuff-interest would exist if the central bank does nothin…

Interest rates are risk free premiums. If inflation is less than them they are profitable this people move their capital into “risk free assets” like bonds, loans etc that are based on that rate. If the risk free rate is less than the inflation rate then people move their cash into higher risk assets like stocks otherwise they lose out to inflation in the long run. This is said to kick start the economy etc.
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