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  • #31
    Originally posted by seanD View Post
    Printing money is inflation. It's the very definition. You're not inflating prices, you're inflating the money supply.
    The reported inflation figures are increases prices of goods. That's the definition. Governments literally measure it by measuring changes in the prices of goods.

    The prices of goods can increase via:
    1. Companies simply putting their prices up to make more profit (which we can measure and find was a major cause of observed inflation of prices)
    2. Supply chain shortages leading to supply/demand pushing up prices (which we can measure and find was a major cause of observed inflation of prices)
    3. Worker wage increases leading to increases in the price of goods (which we can measure and find was a minor cause of observed inflation of prices)
    4. An increased money supply via Fed intervention or government spending policies, e.g. covid relief checks (which we can measure and find was a minor cause of observed inflation of prices).

    There have been heaps of studies by economists now on inflation over the last year and they've been able to quantify the effects quite clearly. The two primary causes were supply chain issues, and companies simply putting up prices to make bigger profits and using inflation as an excuse for putting up prices. Any Fed intervention now to raise interest rates attacks #3 & #4 which we can quantify as much smaller causes of the inflation, so the Fed is not actually addressing the primary causes of inflation.
    "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
    "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
    "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

    Comment


    • #32
      Originally posted by Diogenes View Post
      Perhaps Starlight still thinks "lockdowns = inflation" means it does so temporarily and still views inflation in a fairly positive light and that low interest rates oppress the poor and make the rich richer.
      I don't know what you mean by "lockdowns = inflation", that makes no sense to me.

      Stanford Economist Justin Wolfers did an interesting study in 2003 where he crunched numbers worldwide over time that analyzed what was happening to people's self-reported level of happiness and the inflation and unemployment levels in the countries they lived in. His study found that 5-6 percentage points of inflation had the same negative impact on happiness as 1 percentage point of unemployment did. I think that's really important information and the Fed should be doing many more studies like this and looking at the topic really seriously given they have a dual mandate with respect to inflation and employment and this data tells them how best to balance those two things.

      Applying Wolfer's 5-6:1 ratio of the seriousness of employment vs inflation, to the numbers we've seen recently under Biden, tells us that the ~5-6 points higher than usual inflation we've seen in the last year compared to the rest of the last decade is worth about 1 percentage point of pain in terms of unemployment. The unemployment rate is about 1 point lower now than it was half a decade or so ago. So those two numbers are roughly going to balance out in terms of the population's happiness levels. The current record-low unemployment is going to do a lot to make people happy, and offset the unhappiness coming from the inflation. (And, given Republicans tried their best to make inflation a political issue in the last elections and their red wave didn't eventuate, I would say there's reasonable evidence that indeed the US population aren't too upset by the current Biden economy of high inflation and low unemployment, so the 5-6:1 importance ratio to the populace looks like it might be about right for the US at present)

      Since a major part of my politics is wanting to maximize happiness, I do really value studies like this, and think we need a lot more of them, so we can follow economic policies that maximize human wellbeing.
      Last edited by Starlight; 03-18-2023, 11:19 PM.
      "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
      "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
      "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

      Comment


      • #33
        Originally posted by Starlight View Post
        The reported inflation figures are increases prices of goods. That's the definition. Governments literally measure it by measuring changes in the prices of goods.

        The prices of goods can increase via:
        1. Companies simply putting their prices up to make more profit (which we can measure and find was a major cause of observed inflation of prices)
        2. Supply chain shortages leading to supply/demand pushing up prices (which we can measure and find was a major cause of observed inflation of prices)
        3. Worker wage increases leading to increases in the price of goods (which we can measure and find was a minor cause of observed inflation of prices)
        4. An increased money supply via Fed intervention or government spending policies, e.g. covid relief checks (which we can measure and find was a minor cause of observed inflation of prices).

        There have been heaps of studies by economists now on inflation over the last year and they've been able to quantify the effects quite clearly. The two primary causes were supply chain issues, and companies simply putting up prices to make bigger profits and using inflation as an excuse for putting up prices. Any Fed intervention now to raise interest rates attacks #3 & #4 which we can quantify as much smaller causes of the inflation, so the Fed is not actually addressing the primary causes of inflation.
        I don't know where you're getting your information from, but like I said, it's probably from Keynesian economists that were getting inflation wrong, and as a result, couldn't predict it. First they said it wouldn't happen, then they said it was transitory, namely Janet Yellen. The reason they get their predictions wrong is their interpretations of it are wrong. Rising consumer prices are a symptom of inflation, but inflation doesn't always manifest in consumer prices. Oftentimes it manifests in asset prices, hence the reason we have stock market bubbles, even during crisis events like pandemics, such as we saw in 2020. Rising CPI we saw in the last couple of years was due to your #2 and #4. The Fed printed masses amount of money (inflation) that poured into the stock market and also funded government spending on covid (hence their bloated balance sheet that's full of treasuries from 2020 to today). The fact there were supply chain disruptions (thanks to lockdowns!) made it even worse because massive amounts of newly created dollars were chasing too few goods and services. Raising interest rates (theoretically) cools rising prices because it curbs spending by making borrowing more expensive and also encourages saving. The likely error the Fed made (aside from years past of printing money and manipulating interest rates to begin with) was not responding to inflation fast enough because of the fact their delusional Keynesian view of inflation is wrong.
        Last edited by seanD; 03-19-2023, 12:49 AM.

        Comment


        • #34
          Originally posted by seanD View Post
          I don't know where you're getting your information from, but like I said, it's probably from Keynesian economists
          I get my information from a variety of sources. Generally speaking I tend to agree with Keynesian economics and generally think it's the most correct, though I do tend to mock the entire field of economics for being very wrong so often. But I am generally quite pleased that post-2008 that monetarists got the boot and we've mostly reverted back to Keynesian style economic theories which are at least somewhat grounded in reality unlike Monetarism (and Keynesian economics pretty much led to the golden age of US prosperity when it was followed post WWII).

          First they said it wouldn't happen, then they said it was transitory
          Well I think they were correct on both points, in the sense that they said the covid spending wouldn't cause major inflation, which it didn't. Something else happened to cause inflation shortly thereafter though. But then when it did, they correctly noted it was transitory because they correctly diagnosed the cause as supply chain issues. Indeed we saw inflation go up and then back down again.

          Those who said it wasn't transitory were pretty much proved wrong when inflation dropped nine months in a row.

          So I would basically say Yellen etc were right on all counts.

          The Fed printed masses amount of money (inflation) that poured into the stock market and also funded government spending on covid (hence their bloated balance sheet that's full of treasuries from 2020 to today).
          I know you're obsessed with this, but I think the evidence is that it just doesn't have anywhere near the level of impact you like to believe. There's a long history of governments sometimes spending more money and sometimes less, and it simply doesn't trigger massive inflation when they spend a bit more. Furthermore, analyses of this particular bout of inflation in the US show the higher government spending wasn't a major cause. The timing's not really right either for government spending as the cause of the inflationary spike, as the deficit exploded under Trump, but we're seeing the inflation under Biden.
          "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
          "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
          "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

          Comment


          • #35
            Originally posted by Starlight View Post
            I get my information from a variety of sources. Generally speaking I tend to agree with Keynesian economics and generally think it's the most correct, though I do tend to mock the entire field of economics for being very wrong so often. But I am generally quite pleased that post-2008 that monetarists got the boot and we've mostly reverted back to Keynesian style economic theories which are at least somewhat grounded in reality unlike Monetarism (and Keynesian economics pretty much led to the golden age of US prosperity when it was followed post WWII).

            Well I think they were correct on both points, in the sense that they said the covid spending wouldn't cause major inflation, which it didn't. Something else happened to cause inflation shortly thereafter though. But then when it did, they correctly noted it was transitory because they correctly diagnosed the cause as supply chain issues. Indeed we saw inflation go up and then back down again.

            Those who said it wasn't transitory were pretty much proved wrong when inflation dropped nine months in a row.

            So I would basically say Yellen etc were right on all counts.

            I know you're obsessed with this, but I think the evidence is that it just doesn't have anywhere near the level of impact you like to believe. There's a long history of governments sometimes spending more money and sometimes less, and it simply doesn't trigger massive inflation when they spend a bit more. Furthermore, analyses of this particular bout of inflation in the US show the higher government spending wasn't a major cause. The timing's not really right either for government spending as the cause of the inflationary spike, as the deficit exploded under Trump, but we're seeing the inflation under Biden.
            No they were wrong. Yellen publicly admitted she was wrong, as did Jerome Powell. Maybe keep informed of US politics and economics if you're going to spout things off you obviously no little about (unless you're just lying, as it's really hard to believe you're so ignorant about things you insist are right). They were saying it was transitory as it was going higher, meaning they assumed it wouldn't go higher but would come down quicker than they claimed it would. Most of everything else you wrote is utter nonsense and not worth addressing. CPI is coming down because of higher interest rates, and any economist will tell you that. Even the Keynesian nutter Krugman will tell you that.

            Comment


            • #36
              Originally posted by seanD View Post
              No they were wrong. Yellen publicly admitted she was wrong, as did Jerome Powell. Maybe keep informed of US politics and economics if you're going to spout things off you obviously no little about (unless you're just lying, as it's really hard to believe you're so ignorant about things you insist are right). They were saying it was transitory as it was going higher, meaning they assumed it wouldn't go higher but would come down quicker than they claimed it would. Most of everything else you wrote is utter nonsense and not worth addressing. CPI is coming down because of higher interest rates, and any economist will tell you that. Even the Keynesian nutter Krugman will tell you that.
              Sean I'm not particularly an expert on economics and I don't follow the details of what Yellen does or doesn't say from day to day. I don't see every single thing that's ever published in the news. Please don't suggest I was lying, truth is sacred to me and I don't lie. I do know enough economics to be fairly confident in my opinion that you are majorly wrong on economic matters in general though.

              IIRC you've been pretty much predicting sustained hyperinflation on this forum for multiple years. A temporary inflation spike that's now going away is not you being right, it's you being wrong.
              "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
              "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
              "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

              Comment


              • #37
                Originally posted by Starlight View Post
                Sean I'm not particularly an expert on economics and I don't follow the details of what Yellen does or doesn't say from day to day. I don't see every single thing that's ever published in the news. Please don't suggest I was lying, truth is sacred to me and I don't lie. I do know enough economics to be fairly confident in my opinion that you are majorly wrong on economic matters in general though.

                IIRC you've been pretty much predicting sustained hyperinflation on this forum for multiple years. A temporary inflation spike that's now going away is not you being right, it's you being wrong.
                Well, if you're going to go there, to be accurate, I predicted stagflation about two years before most pro economists (of which I'm not) started predicting it...

                https://theologyweb.com/campus/forum...come#post22455

                And inflation is not going away. It's been falling here in the states, but now it looks like it's starting to get stagnant. Though it's still pretty high in other countries. I believe we're already in a stagflationary scenario which is going to get a lot worse, particularly when the Fed has to reverse course and start QE again. I do believe we're eventually going to reach hyperinflation and it's going to be global. The debt market is going to continue to unravel which will force central banks into printing money like crazy to try and keep it propped up.

                Comment


                • #38
                  Originally posted by seanD View Post
                  And inflation is not going away. It's been falling here in the states, but now it looks like it's starting to get stagnant.
                  The trendline of 12-monthly inflation falling is extremely linear. I just calculated the R2 of it since the June peak and it's .98! If science I was doing had a trendline that looked as linear as that, I would be super-pleased with my data. So in the standard inflation numbers themselves there is absolutely no sign of it "starting to get stagnant". Are you looking at some other metric for this claim?

                  I also dug into the month-on-month numbers, and I would say they show a better story: High inflation is over. From April 2021 to July 2022, 10 of 15 of those months had month-on-month inflation of 0.7 or higher. Since August 2022 (incidentally when the Inflation Reduction Act was passed), 0 of 8 months have had month-on-month inflation of 0.7 or higher. Basically high inflation stopped dead in the month of August. Either the Inflation Reduction Act did it's job spectacularly the moment it was passed or it was a total coincidence. (Fed rate hikes mostly post-dated the disappearance of high inflation so they're likely not the cause).

                  The 12-monthly inflation is very much a lagging indicator, and is only still high because it includes some of those pre-August high months from last year. In 4 months time, when no months from before August are in the 12-monthly indicator anymore, the 12 monthly inflation figure will be around 4. That's not a number the Fed will love love (they're prefer 2%), but it's a number that the average person won't perceive as high (compared to the 8-9% that people were complaining about).


                  So, shall we have a prediction contest? I predict 12-monthly inflation will continue to drop at ~0.4 percentage points per month. By July we'll be looking at 12-monthly inflation around 4.

                  You think we're getting 'stagnant'? So what is your prediction in terms of the numbers over the next 4 months? Are you happy to come back to this in July and see who was right?
                  Last edited by Starlight; 03-19-2023, 05:15 AM.
                  "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
                  "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
                  "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

                  Comment


                  • #39
                    P.S. Let's say when I say "around 4" in July for 12-monthly inflation in the month ending June 2023 that my prediction is the 3.0 - 5.0 range.

                    For a super-bonus prize, I'll say it will be 3.6 in June 2023.
                    "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
                    "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
                    "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

                    Comment


                    • #40
                      Originally posted by Starlight View Post
                      The trendline of 12-monthly inflation falling is extremely linear. I just calculated the R2 of it since the June peak and it's .98! If science I was doing had a trendline that looked as linear as that, I would be super-pleased with my data. So in the standard inflation numbers themselves there is absolutely no sign of it "starting to get stagnant". Are you looking at some other metric for this claim?

                      I also dug into the month-on-month numbers, and I would say they show a better story: High inflation is over. From April 2021 to July 2022, 10 of 15 of those months had month-on-month inflation of 0.7 or higher. Since August 2022 (incidentally when the Inflation Reduction Act was passed), 0 of 8 months have had month-on-month inflation of 0.7 or higher. Basically high inflation stopped dead in the month of August. Either the Inflation Reduction Act did it's job spectacularly the moment it was passed or it was a total coincidence. (Fed rate hikes mostly post-dated the disappearance of high inflation so they're likely not the cause).

                      The 12-monthly inflation is very much a lagging indicator, and is only still high because it includes some of those pre-August high months from last year. In 4 months time, when no months from before August are in the 12-monthly indicator anymore, the 12 monthly inflation figure will be around 4. That's not a number the Fed will love love (they're prefer 2%), but it's a number that the average person won't perceive as high (compared to the 8-9% that people were complaining about).


                      So, shall we have a prediction contest? I predict 12-monthly inflation will continue to drop at ~0.4 percentage points per month. By July we'll be looking at 12-monthly inflation around 4.

                      You think we're getting 'stagnant'? So what is your prediction in terms of the numbers over the next 4 months? Are you happy to come back to this in July and see who was right?
                      That's great! It means Bidenflation has only caused prices to raise around 14% since Feb 2021.

                      As for the Inflation Reduction Act, that'll have to be total coincidence, given that the CBO rated it as having "negligible" impact on inflation, and over the next decade was "Statistically indistinguishable from zero":


                      Source: https://apnews.com/article/inflation-biden-health-congress-climate-and-environment-63df07e15002c01fb560a6f0e69fcb03

                      WASHINGTON (AP) — With inflation raging near its highest level in four decades, President Joe Biden on Tuesday signed into law his landmark Inflation Reduction Act. Its title raises a tantalizing question: Will the measure actually tame the price spikes that have inflicted hardships on American households?

                      Economic analyses of the proposal suggest that the likely answer is no — not anytime soon, anyway.

                      The legislation, which was approved by Congress last week, won’t directly address some of the main drivers of surging prices — from gas and food to rents and restaurant meals.

                      Still, the law could save money for some Americans by lessening the cost of prescription drugs for the elderly, extending health insurance subsidies and reducing energy prices. It would also modestly cut the government’s budget deficit, which might slightly lower inflation by the end of this decade.

                      The nonpartisan Congressional Budget Office concluded this month that the changes would have a “negligible” impact on inflation this year and next. And the University of Pennsylvania’s Penn Wharton Budget Model concluded that, over the next decade, “the impact on inflation is statistically indistinguishable from zero.”

                      © Copyright Original Source


                      Last edited by CivilDiscourse; 03-19-2023, 05:54 AM.

                      Comment


                      • #41
                        Originally posted by CivilDiscourse View Post
                        That's great! It means Bidenflation has only caused prices to raise around 14% since Feb 2021.
                        If inflation didn't work for Republicans in the midterms when it was actually near-peak, it's hardly going to work for them when it's gone down.

                        But sure, try to run on it in 2024. That red wave will Totally Happen This Time.

                        As for the Inflation Reduction Act, that'll have to be total coincidence, given that the CBO rated it as having "negligible" impact on inflation, and over the next decade was "Statistically indistinguishable from zero":
                        It's possible they didn't account for something important. It does seem rather coincidental otherwise that there was a step-change in the inflation levels exactly when the Inflation Reduction Act was passed. It could be, of course, that the administration did something else that had the effect, because IIRC they were throwing a bunch of things at the wall to hope something stuck with regard to inflation around that time.
                        Last edited by Starlight; 03-19-2023, 06:34 AM.
                        "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
                        "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
                        "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

                        Comment


                        • #42
                          Originally posted by Starlight View Post
                          If inflation didn't work for Republicans in the midterms when it was actually near-peak, it's hardly going to work for them when it's gone down.

                          But sure, try to run on it in 2024. That red wave will Totally Happen This Time.

                          It's possible they didn't account for something important. It does seem rather coincidental otherwise that there was a step-change in the inflation levels exactly when the Inflation Reduction Act was passed. It could be, of course, that the administration did something else that had the effect, because IIRC they were throwing a bunch of things at the wall to hope something stuck with regard to inflation around that time.
                          If you want to credit the IRA, you'd need to point towards something in the act that would actually have reduced inflation short term. Some provision that would actually lower inflation almost immediately across the country.

                          Comment


                          • #43
                            Originally posted by CivilDiscourse View Post

                            If you want to credit the IRA, you'd need to point towards something in the act that would actually have reduced inflation short term. Some provision that would actually lower inflation almost immediately across the country.
                            For the sarcastically impaired the following is said in jest

                            It obviously reduced inflation because that's the title of the legislation and legislation titles are never gimmicks

                            P1) If , then I win.

                            P2)

                            C) I win.

                            Comment


                            • #44
                              Originally posted by Diogenes View Post
                              For the sarcastically impaired the following is said in jest

                              It obviously reduced inflation because that's the title of the legislation and legislation titles are never gimmicks

                              Probably the title of the bill itself had such innate power that inflation saw it and just ran away scared.
                              "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
                              "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
                              "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

                              Comment


                              • #45
                                Originally posted by seanD View Post

                                Printing money is inflation. It's the very definition. You're not inflating prices, you're inflating the money supply. The economists you're listening to are probably the same economists that got inflation totally wrong (i.e. Krugman, Yellen, et al). They're wrong because their interpretations of inflation is Keynesian nonsense. Yellen is especially delusional.
                                I'm not sure Yellin believes what she says.

                                Krugman, OTOH, what has he got right in the past decade or so? I'm sure he must have been right about something given the frequency of his forecasts and pronouncements, but he's gotten so much very, very wrong as of late I wonder why anyone is still paying him any attention.

                                I'm always still in trouble again

                                "You're by far the worst poster on TWeb" and "TWeb's biggest liar" --starlight (the guy who says Stalin was a right-winger)
                                "Overall I would rate the withdrawal from Afghanistan as by far the best thing Biden's done" --Starlight
                                "Of course, human life begins at fertilization that’s not the argument." --Tassman

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