Federal Reserve to increase interest rates by 75 basis points • Hacker News Board

Re: Federal Reserve to increase interest rates by 75 basis points

#291

Post by notch656a » Wed, Jul 27, 2022, 9:37 PM UTC

nHD93pTC78g6wvE wrote: post #285

notch656a wrote: post #122

Earlier quoted context omitted.

>If the barriers to entry are too high, then price controls or nationalization. Or remove the barriers, like regulation/licensing/taxation.

The barrier is capital expenditure, not regulation/licensing/taxation. Besides, any competitor entering the market would be expected to make just as much or more profit as the existing companies. Which means they would price their product just the same as the existing companies.

>The barrier is capital expenditure, not regulation/licensing/taxation.

I don't think you can just decide by fiat that things like regulation and licensing aren't barriers. Taxi medallions before Uber comes to mind.

>Besides, any competitor entering the market would be expected to make just as much or more profit as the existing companies

You also cannot just decide by fiat that adding more competitors mean the same amount or more profit. I don't think it is a very popular economic opinion to believe that adding more competition raises the profit. I do not understand why any rational competitor would expect their profit would be higher with more competition, unless they have some kind of edge.

Re: Federal Reserve to increase interest rates by 75 basis points

#292

Post by Analemma_ » Wed, Jul 27, 2022, 9:45 PM UTC

codetrotter wrote: post #77

ParksNet wrote: post #66

Earlier quoted context omitted.

Easiest way to increase labor supply is to immediately increase the retirement age to 70. Welfare and retirement systems across the West are insolvent at current settings anyway.

Idk what the retirement age in other countries is but here in Norway I think it is currently 67. How much additional productive work do we realistically expect people to be able to supply, from age 67 to age 70?

Raising the retirement age isn't about getting more work out of people, but reducing the number of years the state has to pay retirement benefits.

Re: Federal Reserve to increase interest rates by 75 basis points

#293

Post by cm2187 » Wed, Jul 27, 2022, 9:48 PM UTC

OGWhales wrote: post #272

cm2187 wrote: post #121

Earlier quoted context omitted.

The shortage of housing and population growth have been around for 20 years and the fear until a year ago was deflation not inflation. Don't think that's what is driving inflation. Money printing is what caused the initial rise in prices. But we aren’t printing money anymore, so that would be a one off. Super tight labor market is what will create the self-fulfiling cycle of prices up => higher wages => prices up. I…

> Super tight labor market is what will create the self-fulfiling cycle of prices up => higher wages => prices up. I think the Fed is trying to create unemployment, so that it breaks the ability to demand higher wages, and stops the cycle. This is the current view of most people I talk to but I’m skeptical that rising wages is the cause here given what prices we are seeing rise the fastest. If rising wages were the c…

I don't think anyone is worried about hyper-inflation right now. You almost always have a out of control printing press behind hyper-inflation. The risk is more 1970s style high inflation. And I am not saying that rising wages caused the current inflation printing, just that the causes of the current inflation printings are mostly one-offs, and that it is wages that will cause this to become a cycle like it was in most previous high inflation environments.

Re: Federal Reserve to increase interest rates by 75 basis points

#294

Post by landemva » Wed, Jul 27, 2022, 9:51 PM UTC

pm90 wrote: post #180

throw_m239339 wrote: post #138

Earlier quoted context omitted.

> No. Easiest by far is to relax immigration restrictions. Easiest way to make citizens of a country vote for anti-immigration parties is to significantly increase immigration.

Regrettably, This is what does tend to happen. But its also a failure of society because immigrants are easy targets for scoring political points, despite it being repeatedly shown how beneficial immigration has been to Western econonomies.

That is legal immigration of persons who can pass a background check, are healthy without disease, and who can work to support themselves.

Re: Federal Reserve to increase interest rates by 75 basis points

#295

Post by treeman79 » Wed, Jul 27, 2022, 9:51 PM UTC

goatcode wrote: post #148

mjr00 wrote: post #87

Earlier quoted context omitted.

> It's too difficult to curb demand for things like food and housing if the population is growing. It's also difficult (impossible) to curb demand for housing if housing is far and away the best investment you can possibly make, both in the short, medium, and long-term. Unfortunately, so many people in the west have their net worth tied up in their homes that policies directly targeting property values is political s…

The sad thing is that individual landlords are among the most responsive to tenant needs, while corporate landlords often are sons of Hell who should be Thanos-snapped out of existence.

Yep. My rental (invitation Homes ) had a major gas leak that they covered up by keeping windows open when I did walk through. When I asked about smell they kept saying it was new carpet etc.

Turned our cap for gas was just sitting on pipe. All the gas pipes were hand done (badly) and against code.

So permanent brain and nerve injuries for while family and hundreds of thousands in hospital bills.

Screw them.

Re: Federal Reserve to increase interest rates by 75 basis points

#296

Post by landemva » Wed, Jul 27, 2022, 9:57 PM UTC

bronco21016 wrote: post #99

waythenewsgoes wrote: post #71

Earlier quoted context omitted.

This doesn't work, when we tried this most recently all it did was increase stock buybacks by large corps. It's just effectively a wealth transfer to those already at the top of the food chain.

This exactly. Look at airlines. They lit tens of billions on fire in stock buy backs rather than pouring it into their businesses from 2015-2020. Who got the first corporate handouts when COVID decimated travel? Individual actors will act in their best interest according to the incentive structure in place.

USA handouts of money to airlines and foreign cruise ship operators was disgusting. Americans are soft and didn't do anything about it.

Re: Federal Reserve to increase interest rates by 75 basis points

#297

Post by rurp » Wed, Jul 27, 2022, 10:04 PM UTC

pindab0ter wrote: post #242

lamontcg wrote: post #208

Earlier quoted context omitted.

"Tell me you were too young to remember Alan Greenspan without telling me that" The Fed has always shied away from saying things too bluntly, and preferred to deal with wishy washy code words. If it ever says something bluntly you know they really mean it. Something like "softened" is a deliberately ambiguous phrase designed to acknowledge the reality that they're declining without causing panic, by being uncertain a…

How does an interest increase influence unionization?

Raising interest rates can crash the economy resulting in higher unemployment. Higher unemployment means less bargaining power for workers, of which includes union strength.

I'm not much for conspiracy theories but it's hard to not fixate on the sequence of events here. The past year or two is the only time in my lifetime that workers have seen their market power increase significantly, and it's being quickly followed up by moves that will likely crash the economy and will certainly decrease labor's bargaining power.

Re: Federal Reserve to increase interest rates by 75 basis points

#298

Post by UncleOxidant » Wed, Jul 27, 2022, 10:04 PM UTC

notch656a wrote: post #175

UncleOxidant wrote: post #42

Earlier quoted context omitted.

> Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; I agree with you on this. They're ostensibly to help people afford to buy more gasoline. We should let the high gas prices change behavior instead. > drop student debt forgiveness nonsense. Not sure I agree with you on this. While I don't think it would be a great idea to forgive all s…

Student loan forgiveness is a regressive tax.

Which is why I'm saying it should be means tested.

Re: Federal Reserve to increase interest rates by 75 basis points

#299

Post by mint2 » Wed, Jul 27, 2022, 10:10 PM UTC

JumpCrisscross wrote: post #173

mint2 wrote: post #156

Earlier quoted context omitted.

There isn’t a shortage of many items that have had large price increases like oreos. There is no shortage on a lot of items but the companies see opportunity to raise prices at will in the current climate simply because they can

> isn’t a shortage of many items that have had large price increases like oreos The wheat, the trucks, the oil and the labour that make every Oreo have increased in price. (We have amply-documented wheat, energy and logistics shortages worldwide.) Also, nobody needs Oreos. The concept of “price gouging” is economically illiterate, but the nonsensicality squares when applied to literal candy.

Look I am using Oreos as a general example but even gas prices do the same.

Input costs may rise by x cents but the companies mark up prices by 5x because they can, not because they have a shortage.

Gas prices are way higher than they should be but it’s not all the reasons the oil companies like to point to. They simply point to supply to distract from price gouging. The house is even trying to get the government to investigate that.

Taking contrived narrow minded interpretations of comments and glaringly ignore rather apparent facts and then alluding that the original comment is “nonsensical” and “illiterate” makes your comment seem that it lacks substance and just wants to resort to debate using insults rather than actual facts and context.

Re: Federal Reserve to increase interest rates by 75 basis points

#300

Post by dhritzkiv » Wed, Jul 27, 2022, 10:23 PM UTC

UncleOxidant wrote: post #42

nodesocket wrote: post #10

Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; learn economics 101) and drop student debt forgiveness nonsense. The fed is trying to curb inflation, while politicians are trying to get re-elected at any cost, fighting the fed.

> Now if we can only get states (like California) to stop giving out stimulus payments (they literally calling it inflation stimulus; I agree with you on this. They're ostensibly to help people afford to buy more gasoline. We should let the high gas prices change behavior instead. > drop student debt forgiveness nonsense. Not sure I agree with you on this. While I don't think it would be a great idea to forgive all s…

Why means test for student loan forgiveness? It adds complexity/loopholes to be more trouble than it's worth, and it's likely not necessary: wealthy families don't need student loans, so those with a large familial net worth with student loans should be a rounding error. In addition, those from wealthy families are more likely to take unpaid internships, thereby qualifying for 'low income' in that way.