Inflation is at a 40 year high. What can history teach us? • Hacker News Board

Re: Inflation is at a 40 year high. What can history teach us?

#391

Post by stingraycharles » Wed, Oct 05, 2022, 9:07 AM UTC

vladimirralev wrote: post #360

stingraycharles wrote: post #253

Earlier quoted context omitted.

Yeah in the grand scheme of things, this doesn’t impact inflation all that much, but it does help the people that need it most. Just like increasing the minimum wage to keep up with inflation does. Over the past year businesses have increased their prices all over the board, you can’t then just simply say “but inflation!!” when you want to help the people with some amount of compensation for this.

If you take it just one step further, the people "that need it most" really only need it in order to instantly donate it to the megacorps with pricing power at ever-increasing prices. The handouts help only in that instant and at the very next clock cycle that money is now in the hands of the megacorps. Printing money and handouts only help the top of the top in the pricing power hierarchy. If you want to actually he…

From that perspective, anything always ends up in the top of the top of megacorps, and I find it not a very compelling argument to not help people just because they’re at the mercy of megacorps.

You want to tax these megacorps additionally yes, especially if they’re profiting from the current situation. But at the same time, it’s also important to redestribute that wealth towards those who have the biggest problems right now.

Re: Inflation is at a 40 year high. What can history teach us?

#392

Post by KptMarchewa » Wed, Oct 05, 2022, 9:09 AM UTC

scarecrowbob wrote: post #206

taftster wrote: post #198

Earlier quoted context omitted.

Or we are forced to make them last longer.

That doesn't match my experiences; IME cars do last longer now. I have owned and spent substantial time driving a 1978 Buick Regal and a 1968 Westphalia VW van. I don't think that you're gonna see 200K miles out of either of those vehicles. The Buick had about 120K on it and was clearly on its last legs. It's likely been scrapped. The VW only runs because I sold it to a mechanical engineer who wanted to have a projec…

People are extremely overestimating how cars last decades ago. Barring other things, corrosion protection was nonexistent, few year old cars were rusting away.

Re: Inflation is at a 40 year high. What can history teach us?

#393

Post by gbro3n » Wed, Oct 05, 2022, 9:09 AM UTC

mrb wrote: post #230

rdtwo wrote: post #134

Earlier quoted context omitted.

Yeah but that’s not the whole picture… in 1962 the ford truck was $2000 now is around 40,000 so while a new one is better you still have to earn 2x as much to get the most basic one available

When I go to ford.com and look at their basic truck, the 2023 Maverick, I see "starting at $22,195". So if a 1962 truck truly sold for $2000, the inflation seems to account for entirely the price increase. And I'm pretty sure everyone will agree a 2023 Maverick is superior to a 1962 F-100 in every conceivable aspect. Housing and healthcare are better examples of goods or services whose prices have increased faster th…

I suspect that to an extent, prices rise with the proportion of income people are willing to allocate to something. Cars will rise to the amount that matches the importance people place on them. If cars become less important due to electric bikes and Zoom, manufacturers will be able to charge less. The investment in researching car design would decrease accordingly. Same with energy sources etc.

Re: Inflation is at a 40 year high. What can history teach us?

#394

Post by KptMarchewa » Wed, Oct 05, 2022, 9:12 AM UTC

0xy wrote: post #373

bushbaba wrote: post #226

Earlier quoted context omitted.

The excess tax revenues was also caused by overly inflated IPOs and more than normal capital gains. At least in CA, if the surplus is large enough the government is legally required to give the money back if not spent. Gavin Newsom in this case is acting like Robinhood. Taking from the rich and giving to the less well off.

He's taking from the children of the recipients, considering California's current debt load. When you're underwater, a "profit" doesn't mean you're suddenly flush with cash. It's still debt-funded frivolity, which will paid by children.

Current debt is being quickly inflated away. Also, $143 billion debt is peanuts for 3 trillion dollars economy like California.

So, your "children" comments are pure demagogy.

Re: Inflation is at a 40 year high. What can history teach us?

#395

Post by saurik » Wed, Oct 05, 2022, 9:14 AM UTC

consp wrote: post #354

zie wrote: post #156

Earlier quoted context omitted.

I haven't dug into everything you are doing, but the biggest flaw I see seems to be that you assume Cash returns 0% nominal, i.e. that there is no return for holding cash. That is only true if you hide it under your mattress(and no deflation happens). Most people do not hide money under their mattress anymore, especially if they have large amounts of it. They put it in a bank account or in a MMF or some other interes…

Doesn't that practically mean the rich get richer and the poor stay poor? If it would be net 0 everything would stay the same?

Is that surprising? Alternatively, do you have a fix in mind? Having power means you can build more things that give you more power faster than someone with less power. You can't change this using inflation, as people will just hold something else instead of cash (and, in fact, inflation seems to most punish the people with the least power, as those people are spending a much much greater proportion of their income on critical consumption and are least able to hold assets that aren't cash... hell: we make laws that actively limit or even prevent poorer people from holding non-cash assets "for their own protection").

Re: Inflation is at a 40 year high. What can history teach us?

#396

Post by tsimionescu » Wed, Oct 05, 2022, 9:14 AM UTC

JamesianP wrote: post #384

tsimionescu wrote: post #378

Earlier quoted context omitted.

That's the hope, but it doesn't mean it will happen. There is no law that says you'll find a price point that keeps your business afloat: changing economic conditions can just tank your business; the less critical the good or service is, the more likely it is to happen.

Ok. Now the stripper can't afford to buy food and there's less demand for essentials after all. I'm still not getting how this helps?

Just because the stripper can no longer afford food doesn't mean that food sellers will be able to lower their price. Supply issues can't be solved by price changes.

Taken to the extreme, people will die of starvation until the population adjusts, so still in the long run demand and supply will meet at the price point.

Re: Inflation is at a 40 year high. What can history teach us?

#397

Post by KptMarchewa » Wed, Oct 05, 2022, 9:16 AM UTC

californical wrote: post #340

jelliclesfarm wrote: post #295

Earlier quoted context omitted.

I wasn’t virtue signalling. Over supply of money will make inflation worse, but constriction would bring down spending. A labourer making daily wages and supplemented by govt dollars will spend all of it. A millionaire with a few millions in the bank is not going to spend any of it. Especially during an overheated inflationary period. It’s better spent to the most vulnerable to pay for their food, gas and utilities.…

But you just explained why this causes more inflation. In your words, it was money in the banks of wealthy people, meaning not being spent. Money that isn’t spent doesn’t cause inflation because it’s not competing for goods and services. By redistributing to poor people, that previously stationary money is now being used to compete for goods, since poor people generally spend all of their money. So more money is now…

>In your words, it was money in the banks of wealthy people, meaning not being spent.

It is spend on overpriced assets.

Re: Inflation is at a 40 year high. What can history teach us?

#398

Post by chubs » Wed, Oct 05, 2022, 9:17 AM UTC

WalterBright wrote: post #202

zie wrote: post #182

Earlier quoted context omitted.

> (Your cite makes no mention of 2008/2009.) Incorrect: "One may look to politicians’ statements. Even in the Obama-era “stimulus” spending, the administration emphasized promises of eventual debt reduction. " And I have more to say on it later. My cite is from a world-class economist, not from some random person on the Internet. > One one hand, we have thousands of years of history with what causes inflation. > On t…

> There is no rigorous proof of what causes inflation. There's no rigorous proof that smoking causes cancer, either. All we have is a lot of correlation. The historical evidence of printing non-collateralized money corresponding with inflation is overwhelming. It corresponds with gold rushes, and silver rushes. It corresponds with debasing coins by mixing in cheap metals. Me, I'm going where the evidence leads. > I c…

Always fantastic to see someone standing up for basic economics here!

My favourite tech-communicable way to consider it is this: Money is like 'points' for prioritising the way people/resources are allocated in the world, somewhat like agile/scrum planning poker. If you give everyone cards with larger points values, you'll still get the same amount of work done in a given sprint, it's just that you'll get an inflated 'sprint velocity' (eg story points implemented in a fortnight).

Apologies if i've explained this poorly!

Re: Inflation is at a 40 year high. What can history teach us?

#399

Post by KptMarchewa » Wed, Oct 05, 2022, 9:19 AM UTC

rightbyte wrote: post #364

stopping wrote: post #348

Earlier quoted context omitted.

Dismissing a contrary position as "propaganda" only stifles debate, and you haven't presented an argument against "sweet spots". It's a good mental model for many situations. What makes you think there doesn't exist an optimal inflation rate? 0% inflation is generally not a safe target. In an economy you want to avoid deflation at all costs. If consumers expect future price drops, demand can dip significantly and ind…

> If consumers expect future price drops, demand can dip significantly and induce further drops in price Sounds awesome? Saves resources. People save money for a rainy day. Lending goes down.

And you get fired from your job because demand for it disappears. Amazing.

Re: Inflation is at a 40 year high. What can history teach us?

#400

Post by 0xy » Wed, Oct 05, 2022, 9:19 AM UTC

KptMarchewa wrote: post #394

0xy wrote: post #373

Earlier quoted context omitted.

He's taking from the children of the recipients, considering California's current debt load. When you're underwater, a "profit" doesn't mean you're suddenly flush with cash. It's still debt-funded frivolity, which will paid by children.

Current debt is being quickly inflated away. Also, $143 billion debt is peanuts for 3 trillion dollars economy like California. So, your "children" comments are pure demagogy.

That's over half the usual budget for California, so no it's not "peanuts". The ability to service debt is a function of the government's resources, not the entire economy. As pointed out, the year was anomalous for California, who usually runs a deficit of over $50,000,000,000.

Seems like this is a case of a compulsive indebted gambler patting himself on the back for a good streak at the tables.

California's surplus came from temporarily increased CGT receipts. That trend will be reversed this year considering the markets, and they'll be back to bleeding 10 figures.