Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

In Fed and Out, Many Now Think Inflation Helps

nytimes.com

Post reply on HN
Print view View original

181–190 of 236 posts

Re: In Fed and Out, Many Now Think Inflation Helps

#181

Post by eli_gottlieb »

Retric wrote: post #177
eli_gottlieb wrote: post #167

Earlier quoted context omitted.

>Finally, most of these arguments are disputed by the so-called "Austrian school" of economics. It's important to recognize that this school is much, much, much more popular with laymen than with professional economists. This doesn't mean that the school's arguments are wrong, but it does raise questions about why the school's arguments which seem so utterly convincing to so many people, don't manage to gain many con…

Inflation does not hurt land values only cash and cash equivalents like debt and fixed income annuity's.

That would be a pretty good point, except that the real-estate market is currently gunked up with private debt. Eroding private debt with inflation can unlock a whole lot of markets that some asset holders don't want unlocked, because they're using the assets as a store of value (which can be transformed into other people's debt) rather than as a means of production.

Re: In Fed and Out, Many Now Think Inflation Helps

#182

Post by eli_gottlieb »

nl wrote: post #180
eli_gottlieb wrote: post #167

Earlier quoted context omitted.

>Finally, most of these arguments are disputed by the so-called "Austrian school" of economics. It's important to recognize that this school is much, much, much more popular with laymen than with professional economists. This doesn't mean that the school's arguments are wrong, but it does raise questions about why the school's arguments which seem so utterly convincing to so many people, don't manage to gain many con…

Upvoted, but with a note that you are wrong about deflation being good for land owners. Generally speaking land is a good hedge against inflation.

On third thought, I partially retract the comment about land. I've been confusing credit-backed conventional real estate markets with cash-backed land investing.

Re: In Fed and Out, Many Now Think Inflation Helps

#183

Post by mbesto »

eli_gottlieb wrote: post #167
enoch_r wrote: post #53

Absolutely no discussion of inflation is complete without recognition of the fact that inflation and inflation expectations are at historically low levels [1] right now. Economists aren't arguing that we should inflate our way out of debt--they are arguing that we should return to the historical norm. Of course, it's possible that these economists are secretly just pushing inflation as the "hidden tax" we're all up i…

>Finally, most of these arguments are disputed by the so-called "Austrian school" of economics. It's important to recognize that this school is much, much, much more popular with laymen than with professional economists. This doesn't mean that the school's arguments are wrong, but it does raise questions about why the school's arguments which seem so utterly convincing to so many people, don't manage to gain many con…

> When trained and educated economists think something is bullshit economics, we should consider it to probably be bullshit.

On the other hand, well-trained and educated economists could perhaps be incentivized to call something bullshit for reasons outside of academia. Like let's say, hmmm, I don't know, for personal gain?

Re: In Fed and Out, Many Now Think Inflation Helps

#184

Post by eli_gottlieb »

mbesto wrote: post #183
eli_gottlieb wrote: post #167

Earlier quoted context omitted.

>Finally, most of these arguments are disputed by the so-called "Austrian school" of economics. It's important to recognize that this school is much, much, much more popular with laymen than with professional economists. This doesn't mean that the school's arguments are wrong, but it does raise questions about why the school's arguments which seem so utterly convincing to so many people, don't manage to gain many con…

> When trained and educated economists think something is bullshit economics, we should consider it to probably be bullshit. On the other hand, well-trained and educated economists could perhaps be incentivized to call something bullshit for reasons outside of academia. Like let's say, hmmm, I don't know, for personal gain?

Let's imagine what happens in a world where Austrian Economics is true, but economists are lying to the rest of us for personal gain.

First prediction: the economists will tell us that Austrian economics is wrong, but then use the Austrian theories they secretly know are actually true to invest their own assets.

Anyone got an economist's portfolio to look at?

Re: In Fed and Out, Many Now Think Inflation Helps

#185

Post by gabemart »

aortega wrote: post #14

Inflation is a tax. Its the result of somebody creating money from nothing (usually it's the government). Also, it's a great way for an employer to lower your salary by actually increasing it, by doing it at a lower rate than inflation. My country has a 25% inflation rate, that's going on for the last 4 years. Not pretty.

> Also, it's a great way for an employer to lower your salary by actually increasing it, by doing it at a lower rate than inflation.

This is extremely valuable for an economy. This is just about the only way people will accept a pay cut. Employers need to be able to reduce the amount they pay their employees sometimes.

Re: In Fed and Out, Many Now Think Inflation Helps

#186

Post by eli_gottlieb »

jswinghammer wrote: post #104
TreyS wrote: post #96

Earlier quoted context omitted.

Anecdotal but I would imagine it's similar in reputable state schools in red states: Texas has very few Keynesians yet economics professors at the University of Texas are overwhelmingly Keynesian.

Virtually everyone you encounter in the government subscribes to Keynesian economics to the degree that they understand anything at all about economics. When economics is explained in the media at all it is through the lens of Keynesian economics.

Yes, well, Keynesianism is an important piece of the neoclassical synthesis. To be droll: "mainstream theory is mainstream."

Re: In Fed and Out, Many Now Think Inflation Helps

#187

Post by eli_gottlieb »

ef4 wrote: post #127
TreyS wrote: post #92

Earlier quoted context omitted.

"it does raise questions about why the school's arguments which seem so utterly convincing to so many people, don't manage to gain many converts among people who research the subject professionally." I think it would be easier to convince people with no physics knowledge that a bowling ball falls faster than a golf ball. Intuitively, it seems that bowling ball should fall faster. Austrian economics seems to follow a…

> data to validate it. You've accidentally illustrated the disconnect. Because the fundamental disagreement between the Austrians and the more mainstream academic schools of thought is epistemological. Data can only settle differences when both sides agree on the epistemological ground rules. I have an advanced science degree. I'm not afraid of math, and I've plowed through Keynes "General Theory". It doesn't come cl…

The whole problem with Austrian economics is that they reject scientific epistemology entirely by waving a big flag on which is written, "Human Free Will makes everything unpredictable!"

And then they go ahead and make predictions anyway, out of sheer ideology.

If Keynes is epistemologically worthless, fine, but so are von Mises and Hayek. More so, in fact, because they adamantly refuse to employ an empirical method.

Re: In Fed and Out, Many Now Think Inflation Helps

#188

Post by eli_gottlieb »

jswinghammer wrote: post #8

Given that the entire point of the Federal Reserve is to promote inflation it's probably good that they think it's a good idea-otherwise why do they think that they exist? The whole problem is that inflation is theft. You are basically having your property taken out from under you without realizing it. It's historically been very popular as a means of taxing the public without them realizing that's what you're doing.…

>The whole problem is that inflation is theft. You are basically having your property taken out from under you without realizing it.

Property is theft. If we're going to be ideological, I'm throwing my Marxism into the ring, too!

Re: In Fed and Out, Many Now Think Inflation Helps

#189

Post by shard972 »

bermanoid wrote: post #161
mistermann wrote: post #98

Earlier quoted context omitted.

You can make models all day, and I think it should be done in the pursuit of knowledge, but to imply these models can accurately predict behavior is a bit naive IMHO. Economics in a globally integrated economy are of similar complexity as weather, if not worse. Keynesians have been driving the bus for quite some time now, if they have it all figured out as many seem to imply, why do so many things (deficits and debt…

Austrians, for the most part, make no testable predictions. They essentially reject math as a tool, and insist that unless you implement their preferred systems 100%, then they won't work at all, and then explain all observed failures by claiming that it would have worked better if things had been pushed further. Even if they're on to something, they don't give the unconvinced very much to work with. Most of their ar…

> They essentially reject math as a tool, and insist that unless you implement their preferred systems 100%, then they won't work at all

What? What Austrian has ever said that?

Austrian's very rarely deal with absolutes in the real world and mainly deal with relative analysis (If you go with X bad policy, these negative things can occur).

> then they won't work at all, and then explain all observed failures by claiming that it would have worked better if things had been pushed further.

What occurrences are you referencing when an Austrian got policy control?

> and quite frankly I see way too many words and far too little math coming out of their camp to buy any of it.

They reject the idea that maths is a useful tool in economics due to it being a social science.

Re: In Fed and Out, Many Now Think Inflation Helps

#190

Post by nl »

dwaltrip wrote: post #176
cotsuka wrote: post #78

Earlier quoted context omitted.

I'm saying calling something Austrian or Keynesian is inherently political. We should come up with economic models, whether they're Austrian, Keynesian, alien, or dumb, test them against data to see if they hold up, and refine until we get close. Aka, what scientists do. Great article the other day from Krugman about this very topic. Economics might be a science, but economists are not being scientists about it. http…

Economics is not a science. You can't test hypotheses rigorously. Which makes these debates 100x harder.

This is true, but it is also true for other sciences (eg meteorology, mentioned elsewhere).

I'm not sure what the solution to the untestable hypothesis problem is.

Post reply on HN