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Six months into tariffs, businesses have no idea how to price anything

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Re: Six months into tariffs, businesses have no idea how to price anything

#441

Post by JumpCrisscross »

WalterBright wrote: post #432
JumpCrisscross wrote: post #417

Earlier quoted context omitted.

Can you quote where Friedman says “inflation [in America] started the year after the Fed was created”? What you may be trying to say is until about 1900 there was little secular ( i.e. fundamental long-term) inflation, given price levels oscillated more than they moved [1]. But the change to steady inflation pre-dates the Fed. And the secular shift to constant inflation starts in WWII, not 1914 or 1976. [1] https://w…

The chart I showed did not show "steady inflation" before the Fed. The Depression is a bit of a special case, the deflation there was also caused by the Fed and their misunderstanding of how to adapt to changing conditions. "The Federal Reserve System therefore began operations with no effectiye legislative criterion for determining the total stock of money. The discretionary judgment of a group of men was inevitably…

I’m not seeing anything in these quotes claiming there wasn’t inflation in America before the Fed.

Re: Six months into tariffs, businesses have no idea how to price anything

#442

Post by jibal »

tbossanova wrote: post #392
jibal wrote: post #322

Earlier quoted context omitted.

It depends on which definition of the word is being used. For the informal one, "very foolish or stupid", it's literally true.

I’m still not sure what the misuse is. “Literally” is now commonly used as an intensifier, like how “awesome “ used to mean inspiring awe, including if you were scared of something, and now is mostly an intensifier. Awesome, dude!

C'mon ... you know what "misuse" refers to, even if it's no longer considered to literally be a misuse.

https://www.merriam-webster.com/dictionary/literally

Re: Six months into tariffs, businesses have no idea how to price anything

#443

Post by JumpCrisscross »

WalterBright wrote: post #407
tombert wrote: post #136

Earlier quoted context omitted.

That is measurably untrue and it took me about ten seconds of searching to find it. https://www.billmeridian.com/articles-files/inflation.htm and many others. Historically I know you tend to argue pretty dishonestly but this was pretty easy to find and so either you're lying or didn't bother doing any research past reading Ayn Rand. Also, prices spiking up from incompetent threats of tariffs and not coming down are c…

Check out the graph: https://www.visualizingeconomics.com/blog?tag=Inflation Scroll down to "US Inflation 1790-2015". "-0.2% Average Annual Inflation 1774-1912"

> Check out the graph

Visualizing Economics cites this source [1]. VE seem to lie about what it says.

Measuring Worth shows 1774 CPI at 7.8; by 1912 it is 9.4 [2]. That’s a low, low inflation rate of 0.1% per year, 20% over 138 years. But it’s not zero and it’s certainly not negative.

If we take 1790 (8.86) to 1914 (9.69), MW shows 0.07% annual inflation. That is the statistic you should be pointing to.

But! Within the 1790 to 1914 era we see inflation from 1790 to 1814 (2.75% annually; prices doubled over 20 years). During the Civil War, prices doubled in just five years; inflation 1860 to 1865 was over 14% annually. (CPI inflation goes to 2% annually between 1914 and 1944, 3.7% ‘44 to ‘76, 4.2% ‘76 to ‘08 and 2.4% from ‘08 to ‘24.)

We had inflation in America before the Federal Reserve. It was lower, long term, than it has been post Fed. But the common factor to our inflation is war. To the extent there is a link in these data, and I’m saying this having not noticed this before, it’s between inflation and war.

[1] https://www.measuringworth.com/datasets/uscpi/#

[2] https://www.measuringworth.com/datasets/uscpi/result.php

Re: Six months into tariffs, businesses have no idea how to price anything

#445

Post by pydry »

jennyholzer wrote: post #145
pydry wrote: post #128

Earlier quoted context omitted.

The ironic thing is that tariffs are the right tool to reindustrialize America (over the period of ~a decade) but theyre being wielded with the skill and grace of a crack addled ferret by somebody who thinks it's a magic wand.

i don't see any indication that either republicans or democrats intend to reindustrialize america

There is evidence they are trying it just isnt particularly effective.

Part of the problem is that it runs up against the corporate lobbies who would rather take a higher short term profit margin, let American industry hollow out and buy gold + a luxury bunker in New Zealand to prep for the worst case scenario.

Re: Six months into tariffs, businesses have no idea how to price anything

#447

Post by WalterBright »

JumpCrisscross wrote: post #441
WalterBright wrote: post #432

Earlier quoted context omitted.

The chart I showed did not show "steady inflation" before the Fed. The Depression is a bit of a special case, the deflation there was also caused by the Fed and their misunderstanding of how to adapt to changing conditions. "The Federal Reserve System therefore began operations with no effectiye legislative criterion for determining the total stock of money. The discretionary judgment of a group of men was inevitably…

I’m not seeing anything in these quotes claiming there wasn’t inflation in America before the Fed.

The Friedman quotes attributed inflation to the actions of the Fed.

As for inflation through the history of the US, see:

https://news.ycombinator.com/item?id=45081346

Re: Six months into tariffs, businesses have no idea how to price anything

#448

Post by WalterBright »

JumpCrisscross wrote: post #443
WalterBright wrote: post #407

Earlier quoted context omitted.

Check out the graph: https://www.visualizingeconomics.com/blog?tag=Inflation Scroll down to "US Inflation 1790-2015". "-0.2% Average Annual Inflation 1774-1912"

> Check out the graph Visualizing Economics cites this source [1]. VE seem to lie about what it says. Measuring Worth shows 1774 CPI at 7.8; by 1912 it is 9.4 [2]. That’s a low, low inflation rate of 0.1% per year, 20% over 138 years. But it’s not zero and it’s certainly not negative. If we take 1790 (8.86) to 1914 (9.69), MW shows 0.07% annual inflation. That is the statistic you should be pointing to. But! Within t…

> That’s a low, low inflation rate of 0.1% per year,

See where I quoted: "-0.2% Average Annual Inflation 1774-1912"

BTW, inflation measurements before 1900 are a bit difficult, as how does one compare prices from 1774 with 1912? Not only are records poor, but the goods being compared are wildly different.

I.e. I don't know what the error bars are on the aggregate statistics, and neither do you. 0.1% and -0.2% are realistically well within the error bars. In fact, even today, 0.1% is likely within the error bars, as measuring inflation is fairly difficult, and there's always going to be noise as market prices are a chaotic system.

Re: Six months into tariffs, businesses have no idea how to price anything

#449

Post by heisenbit »

YZF wrote: post #342
epistasis wrote: post #196

Earlier quoted context omitted.

That was the entire point of hiking interest rates, to slow down the economy and stop inflation. Tariffs are universally acknowledged to cause inflation, and we would be in a recovery path if it weren't for the delays that tariffs are causing right now. It is rather interesting to see the difference in standards of accountability for different presidents. Some are responsible for the economy even if its behavior is n…

GDP is still growing and inflation has come down. I agree tariffs contribute to inflation: https://www.frbsf.org/research-and-insights/publications/eco... Before tariffs, in the post-pandemic recovery, we also didn't see hiring go back to pre-pandemic levels. There are other forces like AI adoption. I don't have good intuition around the connection between tariffs and jobs. Yes, higher inflation may require cooling d…

Looking at the 30 year chart YTD there is no indication that rates come down. The short side may be under control of Trump - who's bullying of the Fed raises the prospect of them coming down but the long end of the curve is under the control of market forces and it does not look like going down at all. Real estate market effectively frozen with sales down and for sale up in the realm of decade highs.

Nobody mentioned yet the drop of the dollar making every single import 10% more expensive since the start of the year. That is on top of every tariff and is inflationary.

Government spending went up by a surprising amount while tariff revenue rolls in. I suspect one reason there is no detailed budget is to create the space to move things around without much notice. If a large swath of the tariffs would be ruled illegal (already happened twice, one step to final) the situation could become interesting.

Re: Six months into tariffs, businesses have no idea how to price anything

#450

Post by lm28469 »

toasterlovin wrote: post #229

FWIW, we’ve been affected by the tariffs (10% for now; we import mainly from Vietnam and Thailand at this point). Did our second price increase a few weeks ago. We’ll probably test out how much the market will bear because operating in this market really demands a risk premium. So far it’s not as crazy as the pandemic supply chain crisis, but it’s close. The most insane ending to all of this that I can imagine is tha…

> The most insane ending to all of this that I can imagine

The most insane ending is that tarrifs are reverted but most of the price hike will stay for good.

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