Inflation Scaremongering
drummerboy said:
preach it Atrios!
Speaking of confirmation bias …
The accusation of confirmation bias only applies if you can show where my research is wrong or that I'm ignoring countering data.
Where your research is wrong: PCE hasn’t been on a year-long downward trend.
Where you’re ignoring countering data: Base effects.
DaveSchmidt said:
drummerboy said:
preach it Atrios!
Speaking of confirmation bias …
The accusation of confirmation bias only applies if you can show where my research is wrong or that I'm ignoring countering data.
Where your research is wrong: PCE hasn’t been on a year-long downward trend.
Where you’re ignoring countering data: Base effects.
sez you
and I know what a base effect is
also worth squeezing in:
the exception proves the rule
also, the atrios post has nothing to do with whether inflation is moderating or not, so - whut?
Hot take -- Americans care more about rising gas prices specifically than inflation in general. 8% inflation with moderate gas prices would be less politically dangerous than 5% inflation with high gas prices.
PVW said:
Hot take -- Americans care more about rising gas prices specifically than inflation in general. 8% inflation with moderate gas prices would be less politically dangerous than 5% inflation with high gas prices.
Interesting thought.
And there's not a helluva lot that government can do to ameliorate gas prices, especially in the current supply environment.
jimmurphy said:
PVW said:
Hot take -- Americans care more about rising gas prices specifically than inflation in general. 8% inflation with moderate gas prices would be less politically dangerous than 5% inflation with high gas prices.
Interesting thought.
And there's not a helluva lot that government can do to ameliorate gas prices, especially in the current supply environment.
Sanders wanted to ban fracking for oil and gas entirely, both in 2016 and 2020. The pain at the pump would have been a lot worse had fracking been banned entirely, as well as the cost of natural gas to heat your home. Alternative sources wouldn't have been able to replace oil and gas as fast as Sanders wanted to eliminate fracking. At least Hilary wanted to continue drilling for natural gas as a bridge to alternative energy.
Biden still villifies the oil and gas industry, while asking them to produce and refine more oil.
eta - Biden won't even meet with executives of the oil and gas companies. He lets his cabinet members meet wth them.
I should add to the above that Biden and his cabinet want to ban the export of oil and refined products. Biden just doesn't understand how the oil industry works. U.S. exports of crude oil add to the worldwide supply of oil. Most of the of the oil produced in Texas, Oklahoma and Louisiana is light sweet crude. U.S. refineries on the Gulf Coast use heavy sour crude. What happens is that U.S. producers of light sweet crude trade it for heavy sour crude, that can be used in U.S. refineries. If Biden were to ban exports of U.S. oil, the U.S. refineries wouldn't be able to refine as much as they do now.
Biden just doesn't understand the global oil market.
So from an abstract, ideal policy POV, gas is clearly still too cheap even now. We need to transition off energy sources that are net positive in their carbon output, and basic market theory tells us that the best way to get people to consume less of something is for it to cost more.
But in the real world where people live, we're still very much dependent on oil and gas for.. pretty much everything. Telling your $15/hour worker to just suck it up isn't a winning political strategy, and in order to do things like orient government policy toward transitioning off fossil fuels you have to win elections.
To engage in a bit of thread crossing, I wish Democrats would act more progressively but talk more moderately, eg in this case don't be so showy about demonizing oil and gas but put a lot more effort into electrifying everything the federal government runs and encourage states to do the same without drawing a lot of attention to it. Talk about energy independence, about how we're aggressively pursuing electrical independence to protect the American consumer from being blackmailed by Russia, don't talk about "green jobs" but about "jobs", etc. Talk less, do more, and when you talk frame it very strongly as common sense middle America.
PVW said:
So from an abstract, ideal policy POV, gas is clearly still too cheap even now. We need to transition off energy sources that are net positive in their carbon output, and basic market theory tells us that the best way to get people to consume less of something is for it to cost more.
But in the real world where people live, we're still very much dependent on oil and gas for.. pretty much everything. Telling your $15/hour worker to just suck it up isn't a winning political strategy, and in order to do things like orient government policy toward transitioning off fossil fuels you have to win elections.
To engage in a bit of thread crossing, I wish Democrats would act more progressively but talk more moderately, eg in this case don't be so showy about demonizing oil and gas but put a lot more effort into electrifying everything the federal government runs and encourage states to do the same without drawing a lot of attention to it. Talk about energy independence, about how we're aggressively pursuing electrical independence to protect the American consumer from being blackmailed by Russia, don't talk about "green jobs" but about "jobs", etc. Talk less, do more, and when you talk frame it very strongly as common sense middle America.
because the typical moderate Democrat is owned by business interests, talk is all they are prepared to do.
PVW said:
So from an abstract, ideal policy POV, gas is clearly still too cheap even now. We need to transition off energy sources that are net positive in their carbon output, and basic market theory tells us that the best way to get people to consume less of something is for it to cost more.
But in the real world where people live, we're still very much dependent on oil and gas for.. pretty much everything. Telling your $15/hour worker to just suck it up isn't a winning political strategy, and in order to do things like orient government policy toward transitioning off fossil fuels you have to win elections.
To engage in a bit of thread crossing, I wish Democrats would act more progressively but talk more moderately, eg in this case don't be so showy about demonizing oil and gas but put a lot more effort into electrifying everything the federal government runs and encourage states to do the same without drawing a lot of attention to it. Talk about energy independence, about how we're aggressively pursuing electrical independence to protect the American consumer from being blackmailed by Russia, don't talk about "green jobs" but about "jobs", etc. Talk less, do more, and when you talk frame it very strongly as common sense middle America.
Hear, hear.
The assumption that these people care about ordinary Americans is where the thinking goes sideways.
terp said:
The assumption that these people care about ordinary Americans is where the thinking goes sideways.
I'm curious what you would consider to be "caring about ordinary Americans".
So, what do people think about the Fed's efforts so far?
They don't seem to be doing much vis à vis inflation, but they're sure wreaking havoc through the economy.
drummerboy said:
So, what do people think about the Fed's efforts so far?
They don't seem to be doing much vis à vis inflation, but they're sure wreaking havoc through the economy.
I don't see the point of what the Fed is doing.
From my amateur seat, it appears that inflation is being fueled by oil prices going up, supply chains being tight (especially in semiconductors and other high tech items) and more people having more take-home pay.
I don't see how raising interest rates is going to affect those factors, unless they just want to cause "Just enough" recession. Which does not sound like a good idea, either.
nohero said:
I don't see the point of what the Fed is doing.
From my amateur seat, it appears that inflation is being fueled by oil prices going up, supply chains being tight (especially in semiconductors and other high tech items) and more people having more take-home pay.
I don't see how raising interest rates is going to affect those factors, unless they just want to cause "Just enough" recession. Which does not sound like a good idea, either.
I don't either.
Gasoline prices thanks to oil have gone up a lot. There's really no oil shortage. You can thank the financial guys for that like the commodities markets for that. How often have seen instant pump price increases when OPEC announces a cut even though the gasoline was already refined and present at stations?
The real issue seems to be wage hikes. The numerous everything items we get from our local stores. When they increase employee pay from 10 to 15 an hour they will naturally raise prices. Many corporate firms then take advantage to follow with their large price increases.
drummerboy said:
So, what do people think about the Fed's efforts so far?
They don't seem to be doing much vis à vis inflation, but they're sure wreaking havoc through the economy.
Isn't most of the Fed still Republican holdovers? Such as the market committee that sets interest rates? I don't expect much.
RTrent said:
Isn't most of the Fed still Republican holdovers? Such as the market committee that sets interest rates? I don't expect much.
By my count, nine of the 12 current members of the rate-setting committee were originally appointed by Democrats, and Jay Powell, who is one of the other three, was reappointed by Biden.
nohero said:
I don't see how raising interest rates is going to affect those factors, unless they just want to cause "Just enough" recession. Which does not sound like a good idea, either.
This is exactly what they want.
And you're not paying attention if you haven't seen an effect on the housing market, which also affects the durable goods market.
I don't pretend to know anything about economics (although often it appears the "experts" don't know much more than I do). But from my non-expert POV it looks like the Fed is being pretty impatient. Have they really expected their rate hikes to have brought down inflation already?
Sometimes I think they do these things just so they can be observed doing something. Even if that something turns out to be more harmful than helpful in the long run.
DaveSchmidt said:
RTrent said:
Isn't most of the Fed still Republican holdovers? Such as the market committee that sets interest rates? I don't expect much.
By my count, nine of the 12 current members of the rate-setting committee were originally appointed by Democrats, and Jay Powell, who is one of the other three, was reappointed by Biden.
Well, there goes my theory on incompetence.
I think the Fed started their increases too late and they should not have gone through with the last 75bps increase. They should have sat back and watched the impact that the higher rates + lower fuel costs would have on the economy over a period of 4-6 months.
Doing another 75 and then a 50 before year end is pretty crazy to me. They need to sit on the sidelines at this point.
ml1 said:
I don't pretend to know anything about economics (although often it appears the "experts" don't know much more than I do). But from my non-expert POV it looks like the Fed is being pretty impatient. Have they really expected their rate hikes to have brought down inflation already?
Sometimes I think they do these things just so they can be observed doing something. Even if that something turns out to be more harmful than helpful in the long run.
As far as my memory tells me, the Fed has attacked high inflation exactly once in the last 50 years - which was circa 1980.
They are now using the same 1980 tool in an economic climate which has nothing to do with 1980, and hoping for the best.
The people on the Fed are certainly not dumb, but one really has to wonder what the **** they think they're doing.
I do think they are acting so that they can be observed doing something, but even that has to be questioned. If there's one institution that's insulated from the vagaries of public opinion it's the Fed. Why would they feel the pressure to do something? Maybe they're dumber than I think.
Inflation will eventually come down, but I doubt historians will give credit to the Fed for it.
Also, you know, 8% inflation is not exactly catastrophic. Everyone is overreacting to that, if you ask me.
RTrent said:
The real issue seems to be wage hikes. The numerous everything items we get from our local stores. When they increase employee pay from 10 to 15 an hour they will naturally raise prices. Many corporate firms then take advantage to follow with their large price increases.
It's not the wage hikes; it's corporate greed. They saw an opportunity to raise prices and did and have kept them artificially high. Corporate profits have been at all time highs lately. If wages were driving pricing, profits would not have increased as they have.
Steve said:
RTrent said:
The real issue seems to be wage hikes. The numerous everything items we get from our local stores. When they increase employee pay from 10 to 15 an hour they will naturally raise prices. Many corporate firms then take advantage to follow with their large price increases.
It's not the wage hikes; it's corporate greed. They saw an opportunity to raise prices and did and have kept them artificially high. Corporate profits have been at all time highs lately. If wages were driving pricing, profits would not have increased as they have.
Yeah, it's not wage hikes. Wages are dropping.
https://jabberwocking.com/wages-were-down-once-again-in-september/
High inflation is pernicious with many harmful effects to an economy and to a society. Inflation also is known to feed on itself so it's foolish to say "8% is fine", as if left alone it would stay at 8% or come down on its own. More likely, 8% inflation left to its own devices would lead to 18% inflation, and then maybe 80% inflation. And then get ready for martial law, bread lines and men selling pencils and apples on Maplewood Ave.
Charlie Munger may be an old crank but he's a smart guy who has seen a lot. And he said inflation is a way for democracies to die.
So yeah, I think the Fed should continue to brake forcefully.
Smedley said:
High inflation is pernicious with many harmful effects to an economy and to a society. Inflation also is known to feed on itself so it's foolish to say "8% is fine", as if left alone it would stay at 8% or come down on its own. More likely, 8% inflation left to its own devices would lead to 18% inflation, and then maybe 80% inflation. And then get ready for martial law, bread lines and men selling pencils and apples on Maplewood Ave.
Charlie Munger may be an old crank but he's a smart guy who has seen a lot. And he said inflation is a way for democracies to die.
So yeah, I think the Fed should continue to brake forcefully.
Voodoo economics, and a crock of **** at that.
Ah, as cranky as ever. Don't ever change, Dennis.
Ok, so I guess 9/12 democratic-appointed Fed reserve members, plus the democrat-reappointed chair are practicing voodoo economics and embracing a crock of shyt.
Rather than get angry with me - some anon yahoo on the internet - shouldn't this call into question your steadfast loyalty to the Democratic party?
Smedley said:
Ah, as cranky as ever. Don't ever change, Dennis.
Ok, so I guess 9/12 democratic-appointed Fed reserve members, plus the democrat-reappointed chair are practicing voodoo economics and embracing a crock of shyt.
Rather than get angry with me - some anon yahoo on the internet - shouldn't this call into question your steadfast loyalty to the Democratic party?
WOW...How to unpack this.
First, my voodoo and crock comments were aimed at YOUR ignorant comments. You seem to specialize in this.
Secondly, this has nothing to do with Dem vs Rep, or how staunch I am in my support for the Dems (hint-it ain't as steadfast as you think, but then what other choice is there at this stage of the game?)
Thirdly, I am not angry with you, just dumbfounded at your ignorance.
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preach it Atrios!