Inflation is differential and restructuring (2021) • Hacker News Board

Re: Inflation is differential and restructuring (2021)

#211

Post by lukifer » Sun, May 29, 2022, 5:33 AM UTC

1ncorrect wrote: post #132

frankfrankfrank wrote: post #57

Earlier quoted context omitted.

The thing that has nagged at you as it has me, is the simple fact that not only was “economics” conjured and molded by and for the interests of the upper echelon of society, to control the language and thoughts about its terms; but that at the core of it, it’s nothing more than fraud, deception, con artistry. That’s all inflation is too, fraud that if you would commit it, e.g., you added filler to some product you de…

My current thesis, from a position of absolute agnostic ignorance, is economics is what filled the void in society vacated by religion after the enlightenment. They’re functionally indistinguishable, with mythology replaced by mathematics, and God replaced with GDP. Similarly, they’re both arbitrary rules; conjured, imposed, and protected from scrutiny by the ruling class. That’s not to say it’s not useful, but I fin…

I've used to think the Reagan-era political coalition (persisting to this day) made no sense: the values and worldviews of evangelicals and economic libertarians have terribly little in common. Then it clicked, the common belief that united them: https://en.wikipedia.org/wiki/Just-world_hypothesis

Re: Inflation is differential and restructuring (2021)

#212

Post by lukifer » Sun, May 29, 2022, 5:34 AM UTC

achenatx wrote: post #192

1ncorrect wrote: post #132

Earlier quoted context omitted.

My current thesis, from a position of absolute agnostic ignorance, is economics is what filled the void in society vacated by religion after the enlightenment. They’re functionally indistinguishable, with mythology replaced by mathematics, and God replaced with GDP. Similarly, they’re both arbitrary rules; conjured, imposed, and protected from scrutiny by the ruling class. That’s not to say it’s not useful, but I fin…

the difference between economics (or science) and religion is that economics is used to predict the future. When economics fails to predict the future, the models are changed until they can predict the future. religion tells you what goals you should have and how you should live a life, passing judgement and establishing morality. They are orthogonal to each other.

"Economists have successfully predicted nine of the last five recessions."

Re: Inflation is differential and restructuring (2021)

#213

Post by schemescape » Sun, May 29, 2022, 5:58 PM UTC

schemescape wrote: post #3

The title makes this sound like another conspiracy theory about the government suppressing inflation in official numbers, but the article is actually a rational dive into the non-uniformity of inflation across various categories. The last section attempts to link "differential" inflation to oligopolies, and I'm not sure I buy their arguments there, but it's thought-provoking nonetheless!

Just a note: I meant the article title ("The Truth About Inflation") and not the (subsequently changed) submission title (which is now "Inflation is differential and restructuring (2021)").

Re: Inflation is differential and restructuring (2021)

#214

Post by actionablefiber » Mon, May 30, 2022, 3:07 AM UTC

someguydave wrote: post #208

actionablefiber wrote: post #155

Earlier quoted context omitted.

There's a difference between decreases in the price of specific goods that comes about due to technology, and deflation that comes about due to monetary policy. That I can think of, the obvious difference is that the second one almost definitionally means a steady decrease in nominal wages. This seems like a perverse incentive - if I sock away my first paycheck flipping burgers under my mattress and do nothing with i…

> the obvious difference is that the second one almost definitionally People said similar stuff about negative interest rates, yet they were rolled out and kind of worked around the world. I'm not buying this defense of inflationism.

The prevailing consensus is that interest rates and inflation are inversely correlated, so "negative interest rates worked out fine" isn't a rebuttal to that.

Re: Inflation is differential and restructuring (2021)

#215

Post by neilwilson » Mon, May 30, 2022, 1:47 PM UTC

dataflow wrote: post #198

neilwilson wrote: post #47

Earlier quoted context omitted.

They say that Economics is the science on mistaking stocks for flows, and this is a very good example. Interest is denominated in $/month. Loans are denominated in $. Mixing those up is like mixing up miles per hour and miles. They are different units of measurement - the first is a flow, the second is a stock. Remember that bankers are people too, and they eat just like you do. Therefore interest is nothing more tha…

No, I'm not mistaking stocks for flows. I'm not sure where you got the idea that I'm mixing up interest with the loan principal. I'm sorry but your long-winded explanation (as this topic always produces for reasons I never understand) just isn't something I can make sense of. You're pointing out loops in the payment graph. Sure there are, nobody claimed the graph is loopless. But that obviously doesn't imply 100% of…

"I don't know why you purchase (say) bonds, but most people I know purchase them for the interest,"

You don't need to issue bonds. When government spends it automatically borrows the same amount at that time as a function of the way bank transfers work at the accounting level. Tax payments then reverse that as the money spins around the economy, which reduces that borrowing. What is left is simultaneously what people have saved from that spending flow, and the government deficit.

"You'd think if the government could get the same loans with the same terms without paying interest, then they would avoid paying interest."

That rather depends who government is working for doesn't it. If it is exempting holders of debt assets from the inflation process, by giving them free money when there is no need - while spinning an elaborate story to cover - it makes perfect sense.

"The more you increase the outward flow the more you need to increase the inward flow, and the extent to which you can do the latter is not limitless."

When you turn on the hose pipe, and then increase the flow by turning the tap, do you need to widen or lengthen the pipe, or does the water just come out of the end faster?

Sovereign money is a closed system. The more government spends, the more tax and financial savings it creates. Tax + financial savings = spending. Always. And it can do that until the cows come home.

What stops the process is running out of real things to buy at a price worth paying. Then government spending stops.

Government spending works like spinning a stone across a pond. Each hop is a tax point reducing the size of the next hop, and eventually the stone disappears.

Saving is like videoing the hopping and pressing the pause button. The hopping will then continue when the pause button releases - ie when the savings get spent.

"Nobody's explanation of this ever makes sense to me,"

Perhaps if you drew out the balance sheets, and applied the journals you'd see how it works.

What you're missing, it would seem, is that for every debtor there is a creditor and everything must always add up to zero at all times.

Do that and you'll see that what you're calling 'unsustainable debt' is just a balancing entry in the accounts.