The U.S. economy's big problem? People forgot what 'normal' looks like (2023) • Hacker News Board

Re: The U.S. economy's big problem? People forgot what 'normal' looks like (2023)

#41

Post by hollerith » Tue, Apr 30, 2024, 11:42 PM UTC

reducesuffering wrote: post #39

hollerith wrote: post #38

Earlier quoted context omitted.

OK, but the fact that the definition of M1 changed right around the time Biden took office makes me wonder what Biden policies the change might have been intended to obscure. (I know the Fed is not under the direct control of the White House, but the change might've been made by decision-makers at the Fed whose sympathy with Biden overrode their commitment to impartially reporting monetary information to the public.)

The sibling comment's linked article answers this. "If you put money in a checking account, regulators make banks set aside a cushion as reserves in case they get into trouble. But if you put money into a savings account, regulators tell banks they don’t have to reserve anything. The catch is that it’s only considered a savings account if the consumer is allowed to make no more than six withdrawals per month. It’s wo…

Thanks. Here is the graph for M2: https://fred.stlouisfed.org/series/M2SL

Re: The U.S. economy's big problem? People forgot what 'normal' looks like (2023)

#42

Post by rayiner » Wed, May 01, 2024, 12:19 AM UTC

reducesuffering wrote: post #37

rayiner wrote: post #32

Earlier quoted context omitted.

Thank you, I wasn’t aware of that change. I’m trying to make sense of what’s going on, and it’s hard to do since everyone seems to be in the can for one political faction or the other, and money printing is something both parties did so people aren’t talking about it. According to that source the accounting change is responsible for $11.4 trillion of the change. That means M1 really only went up from $4 trillion to $…

It's probably some of the culprit. But we've had 20% CPI since 2020, so it doesn't wholly explain everything in a "double the money, double the inflation" way. And a higher money supply doesn't mean that quality of life is worse either, since I'm sure you wouldn't want to go back to the 1930 US economy with vastly less money supply. If we could 2x the money supply again and get 1.1x goods & services for it, we should…

Nobody is saying that money supply itself is what’s bad. The problem is that increasing it too quickly caused inflation that’s pissing people off.

Re: The U.S. economy's big problem? People forgot what 'normal' looks like (2023)

#43

Post by rayiner » Wed, May 01, 2024, 12:21 AM UTC

reducesuffering wrote: post #39

hollerith wrote: post #38

Earlier quoted context omitted.

OK, but the fact that the definition of M1 changed right around the time Biden took office makes me wonder what Biden policies the change might have been intended to obscure. (I know the Fed is not under the direct control of the White House, but the change might've been made by decision-makers at the Fed whose sympathy with Biden overrode their commitment to impartially reporting monetary information to the public.)

The sibling comment's linked article answers this. "If you put money in a checking account, regulators make banks set aside a cushion as reserves in case they get into trouble. But if you put money into a savings account, regulators tell banks they don’t have to reserve anything. The catch is that it’s only considered a savings account if the consumer is allowed to make no more than six withdrawals per month. It’s wo…

But M1 did explode “because the Fed printed a bunch of money.” Even excluding the accounting change the Fed more than doubled the M1 money supply, printing more money in two years than in the previous 12 years.

Re: The U.S. economy's big problem? People forgot what 'normal' looks like (2023)

#44

Post by toomuchtodo » Fri, May 03, 2024, 5:40 PM UTC

toomuchtodo wrote: post #8

rayiner wrote: post #4

The denial is amazing. Real wages are down three years into Biden’s presidency: https://jacobin.com/2023/12/real-wages-joe-biden-administrat... . and the loss in purchasing power is understated by CPI, because it has hit areas where people have little flexibility to reduce spending without reducing standard of living: food, transportation, etc. According to Redfin, the house we live in (purchased during the 2016 elec…

Can the federal government build millions of housing units overnight [1]? No. Can they force insurers to not squeeze auto insurance consumers as hard [2]? No. Can they force automakers to reduce their vehicle prices? No (although they are cooling naturally due to the benchmark rate->auto loans->loan payments being unsustainable). Services remain inflated because of reduced labor force participation, and while immigra…

Additional citation:

https://news.ycombinator.com/item?id=40250226 ("HN: An Oil Price-Fixing Conspiracy Caused 27% of All Inflation in 2021")

https://www.thebignewsletter.com/p/an-oil-price-fixing-consp... ("BIG by Matt Stoller: An Oil Price-Fixing Conspiracy Caused 27% of All Inflation Increases in 2021")