People in the US believe that if inflation eases, for example from 4% to 3%, that means that prices are going to go back down to what they used to be before inflation started rising. They furthermore believe that if that does not happen it is proof that the media is lying.
Politicians love communicating about 2nd and 3rd derivatives of prices and debt in ways that even mathematically literate people have trouble immediately interpreting. There's a famous quote about Nixon doing it but it's honestly the current standard mode from all sides trying to avoid blame for the state of the deficit and monetary supply.
This is something being debated across the world. I'm not american and in my country economists wages war over the "inflation is the result of monetary expansion". I know nothing about it, the only thing i know is that inflation is getting worse (almost) everywhere.
The money goes faster on the top side of the wing, which means the money underneath the wing is more compressed, lifting up both sides of the wing. This is known as the "trickle-down" theory of lift.
Yeah no, economists and a lot of people understand the the causes of inflation. There are economists who are paid very well to not understand it though, and such positions are often high in the government and financial sector hierarchies.
Are these the same Fed economists that claimed the elevated inflation levels were transitory in 2021?
There are multiple schools of thought on causes of inflation, but generally I agree with late Milton Friedman that it is "everywhere and always a monetary phenomenon". Money supply expansion growing faster than GDP expansion causes inflation.
>> elevated inflation levels were transitory in 2021But…
> that was correct?
No, it wasn't correct. By "transitory" the Fed meant "no need to do anything, inflation will go down on its own". It didn't go down on it's own, and the Fed had to act, too little too late, which is now causing prolonged inflation problems.
> It went up, then back down, due to a very unusual (almost unique, thus far) external cause.
The cause wasn't external, neither unusual nor unique, it was the Fed's start of interest rate increases, precisely at the time the inflation trend reversed.
It went down after they hiked rates in late 2022 (which causes a drawdown in money supply). The asset bubble that occurred in 2021 would have been avoided if they hiked rates in response to inflation data then instead of holding rates at near zero. Had they held rates at zero, it's likely the inflation would have continued.
The economist Noah Smith graded the predictions of economists who made public statements once the Biden administration started its large spending programs:
>...In 2021, Krugman tweeted: "I like it and plan to steal it. This report does look like what you'd expect if recent inflation was about transitory disruptions, not stagflation redux".
As Smith pointed out:
>...But in late 2021, inflation spread to become very broad-based. Services inflation was always significant, and took over from goods inflation as the main contributor in 2022.
>The notion that this was just some transient supply-chain disruptions that was only affecting specific products was absolutely central to Team Transitory’s claims in the summer of 2021. And that was incorrect.
>...Team Transitory also called the end of the inflation at least a year and a half too soon.
On October 13, 2021 Krugman tweeted "Three month core inflation. Why isn't everyone calling this a victory for team transitory"
>...So they didn’t entirely whiff here. They just greatly overstated their case. And their complacency in 2021 probably fed into the Fed’s decision to delay the start of rate hikes until 2022, which in retrospect looks like a serious mistake.
What did get vindicated was mainstream economics as taught in our textbooks.
As Smith wrote:
>...Mainstream macro’s first victory was in predicting that the inflation would happen in the first place. In February 2021, Olivier Blanchard used a very simple “output gap” model to predict that Biden’s Covid relief bill would raise demand by enough to show up in the inflation numbers. His prediction came true. He didn’t get everything right — he thought wages would rise more than consumer prices, and he neglected the lagged effects of Trump’s Covid relief packages and Fed lending programs. But his standard simple mainstream model got the basic prediction right when most people made the opposite prediction, and this deserves recognition.
>More importantly, mainstream macro appears to have gotten policy right.
Yeah assuming money supply is flat or near flat, supply and demand will influence prices in one market or another in relation to the market as a whole, or you may have temporary periods of inflation followed by periods of deflation as we saw in the 1800s.
If a bank issued you a loan for $100M, that money is effectively created out of thin air. If you then use that to buy a bunch of properties, you are increasing the demand. If others are doing this as well, prices will go up as people bid against each other for the limited supply of properties. This is inflation, because the new demand is directly caused by the creation of new money.
That's begging the question. Inflation is always due to higher money supply. Higher money supply increases demand which increases prices and that's inflation.
It ignore other factors that impact demand and supply.
No really, transonic flow and turbulence are less complicated than what's really going on underneath the quantity theory of money. If it was easy there would be fewer economists.
The only people certain about economics are the kind of folks who run around on HN talking about "printing money". Too lazy to look up your post history to see which camp you belong in.
But no, macroeconomics is understood from sound general principles, but it is not a robust predictive theory. The analogy upthread to Navier-Stokes is apt.
We've had a dozen instances of massive money printing since the 80s but no significant inflation until we had the COVID supply side shock. Now we're getting inflation because of tariff uncertainty, also a supply side shock.
Friedman is wrong, inflation is primarily caused by supply side shocks.
I see.
You might read the article mentioned bu user opo in this same comment thread. And also consider the inflation that occurs in many countries that don't suffer any supply side shock.
It's more complicated than that (lending also increases the money supply) though you're right that "printing money" loosely speaking is the primary irreversible driver.
Depends on the default rate, and I'm pretty sure the past year in the US, default created more money than what was printed (even taking QE into account).
Basically why everybody decided to go with money printing during COVID btw, people realised in 2008 that a 2B default is the equivalent to printing 2B, so if that's the case, why not print money instead (that's a bad calculation imho, in my opinion in a capitalist market economy you need defaults for the market to work, and I would say, you need defaults that pierce the corporate veil).
if i loan you 100. in my head i have 100 of assets coming to me, and you have 100, so the system now has 200.
if you default, "so sorry throwaway you ain't seeing it", i have to write down the expectation im getting that 100 back. which means that i have 0, and the 100 is out in the system, spent. the system now has 100.
it is the case that some people refer to things like bailouts and inflating away your debt as soft "defaulting" but those are special cases and not the general case.
I borrowed 100 from you to buy 100 of expensive stuff to X. I default, the 100 i spent is still in the real economy, and you don't have to reimburse anyone yet. People i paid with the 100 i borrowed still have the money, you have to write you lost 100, but if you do your accounting '''correctly''', that money is actually not really paid or taken directly from your profits (first because it's probably insured or collateralized, but let's ignore that because it add to much complexity): you can basically use my default as your tax break. In the end, maybe you pay back 100, but you'll get 50 from your tax break so ultimately a default of 100 add 50 in the money supply.
(btw: i don't know the number, but my uncle insure companies and their loans for Alliance, i'm pretty sure it's more than 50% that's deduced from taxes when he register a loss, i can't seem to remember our conversation though)
I think that loss counting as tax break is an important part of the system, but in this very case, it does create inflation. Also loan insurers have insurances themselves and the loss is counted multiple time, i'm not sure exactly how the complete system work here works but it seems very efficient at claiming a tax break at multiple level.
"Inflation" simply refers to a rise in general price levels. The cause of inflation is known: someone sets a price.
There isn't a single reason why someone might raise a price. It could be that they have some ideology about the size of the money supply (i.e. "printing money") or it could be that the costs of their inputs went up ("inflation") due to tariffs, or other supply chain problems. Or it could be a cynical bet that the market would bear a higher price ("using inflation as an excuse").
Blaming inflation on this-or-that cause is most definitely a political rather than theoretical exercise.
I might even prefer those that make content for love of the thing and not for profit. I am not against them making a living. But There is enough of examples that in long run jus ending up worse. Maybe with higher "production quality". But worse in other ways that matter.
We didn't have any meaningful primaries in the last presidential election. The elites picked their candidates for a token vote by the people. Third parties are actively suppressed by those same elites.
Smaller state and local elections are better, but that's not where the power or money goes.
Ahhh, ok. I think I’m thinking about Insomnia, which is basically (in fact?) a fork of Postman. Anyways, that fact is what made Postman a dealbreaker for me, even before the drama. Another thing I like about Rest Client is that the configuration is just a text file, so bearer token etc can be updated via script that runs in a loop.
Rest Client has a few cons though, like request chaining.
I was using Rest Client and was very happy with it, but once I needed Rest Client to use my computer's NO_PROXY env variable to avoid using the proxy for a certain url, and I found it was not possible to do that with Rest Client. That's the only reason I had to look for an alternative tool. After an analysis, I liked Bruno and Hurl. I didn't try hurl yet.
Yes, in our experience we associate perceptions and also concepts to other concepts and words. But that doesn't explain 'qualia', the fact of having a conscious experience.
The AIs also associate and classify. Associating does not explain qualia. Why would? The association happens, but we have 'an experience' of it happening.
> Where do you observe the promotion of the absurd narrative that says that the rich are better humans?
This is kind of like asking where one observes the promotion of the absurd narrative that white people are better people. It's rare to get an explicit source, but you have to benefit from it or be willfully blind to it not to believe it's there.
For one example of a reasonably explicit source, a very loud voice in the US agreed that those who benefits from government services are "the parasite class" (https://www.yahoo.com/news/fact-check-musk-reposted-meme-120...). Leaving, therefore, only the wealthy, who (so the narrative goes) impose no burden on others, to be the virtuous, non-parasitic class.
Dunno, to me it's quite obvious the rich (as in the asset generating wealth owning) class are the parasitic ones, almost by definition - after all they get mony for doing nothing.
Them being 'better' in any sense of the word is weirdly orthogonal and juvenile statement.
It doesn't matter if you are a breatthakingly handsome hardworking genius, or you are an ugly imbecile - it's about what assets you own - the whole notion of being better on benchmarks of what humans consider better is irrelevant.
Well, you could look at the examples provided, any of various historical (and modern) class systems, great man theory, do a quick search (e.g. https://www.forbes.com/sites/rainerzitelmann/2019/05/08/new-...), read self-help literature (e.g. rich dad, poor dad), and so on. It might be harder to find media where that narrative isn't either present or intentionally absent.
And just because something is present doesn't mean it's an intentional or complete narrative being promoted by the author. This is simply an idea that's virtually omnipresent in Western societies, like the acceptance of capitalism or the system of colors. Things that challenge these sorts of deeply assumed ideas often seem like attacks on society itself. If you want an author who intentionally addresses it, Ursula Guin has made it a big focus of her works (e.g. Omelas, the hainish cycle).
The idea of prosperity gospel is strong in the US, it doesn't take much more than looking at US elections and seeing the religious poor voting for Trump and using "because he is rich" as one of the reasons for it.
This also ties into Milton Friedman's "everyone runs on greed" idealisms that permeate capitalism.
I think some of this is because you don't live in the US and get to see behavior like this daily.
Yes, I guess I'm not seeing it as many of you do because I live in a society with different values.
Curiosly, in Argentina a popular belief is that "nobody became rich by working" and variations. Being rich here is seen as either the result of luck (born rich) or corruption.
In Argentina leftists newspapers and media are paid by the main populist party (peronism) to promote the anti-rich ideology. Ironically all peronist leaders are super rich.
They want to advance statism, and to keep getting richer by using privileges they have thanks to the State.
> He worked for various years as senior economist in a bank
Ah, it looks like you were in a coma between about 2006 and 2012. I have bad news. Sometimes (whisper it!) banks _employ incompetent people_. I would be reluctant to take "oh, well, he once worked for _HSBC_" as that much of an endorsement.
Not to say that everyone who worked for HSBC was incompetent. But, er, clearly they were not all hypercompetent either, given what happened.
He is experienced. I didn't say he did or didn't do a good job there. My answer is a response to "he has no experience as an economist". It's not a response to what you are argumenting.
The article explains that this is the first time since 2020 that prices stopped increasing, which doesn't mean they are at a level where people can afford them - the article itself attributes the lower purchase power of the average family as one of the main drivers for why they stopped raising. The article also explains that maintenance (expensas) are 22% of the final rent price and those increased 170% from last year. "We stopped raising prices because we priced everyone out" is definitely what I'd call "out of control".
Anecdotally I also know three families who had to move back to their parent's house because they were priced out of the rental market. I won't say that all of this is Milei's fault (although I do have thoughts about his handling of the Rents law), but nonetheless the current situation is far from good.
