Inflation Rearing its Ugly Head

[mrjurrs]

Energy prices, petrol, rent and food: What’s driving the UK’s cost of living crisis?​

Energy prices, petrol, rent and food: What’s driving the UK’s cost of living crisis?

A complex problem of supply and demand is rapidly driving up the cost of living in the UK.

www.newstatesman.com

China's factory inflation hits 13-year high as materials costs soar​

China's factory inflation hits 13-year high as materials costs soar

China's factory gate inflation hit a 13-year high in August driven by roaring raw materials prices despite Beijing's attempts to cool them, putting more pressure on manufacturers in the world's second-largest economy.

www.reuters.com

'Power outages in China may add to global inflation'​

Coal, gas prices skyrocketed since government implemented new environmental standards for power generation, says analyst

'Power outages in China may add to global inflation' - Timeturk Haber

Coal, gas prices skyrocketed since government implemented new environmental standards for power generation, says analyst

www.timeturk.com

What Is the Current US Inflation Rate?​

BY
KIMBERLY AMADEO
Updated September 15, 2021
REVIEWED BY
MARGUERITA CHENG

The U.S. inflation rate as of August 2021 was 5.3% compared to a year earlier. That means consumer prices increased by 5.3% over a year. The inflation rate is an important economic indicator because it tells you how quickly prices are changing. It's measured by the Consumer Price Index (CPI), reported by the Bureau of Labor Statistics (BLS) each month. https://www.thebalance.com/current-u-s-inflation-rate-statistics-and-news-3306139

Okay, So, any of this related to covid?? Sorta, but not as of late. Faulty leadership is to blame. The UK is the 5th largest economy, China is number 2, and we know what the US standing is. So, given the global economic indicators, do we really want to keep borrowing and driving up the debt?? Thanks!!

What is the fundamental factor that determines price in America? Supply and demand.

Supply is messed up. Factories shut or producing less, transportation chains jumbled.

Demand is very high. People have restrained purchases for over a year, and during that year, relief checks have been sent to huge amounts to consumers.

Is there inflation now? Absolutely.
Is much of it transitory? I believe so.

 

[Logophile]

What is the fundamental factor that determines price in America? Supply and demand.

Supply is messed up. Factories shut or producing less, transportation chains jumbled.

Demand is very high. People have restrained purchases for over a year, and during that year, relief checks have been sent to huge amounts to consumers.

Is there inflation now? Absolutely.
Is much of it transitory? I believe so.

My belief is that the pandemic was a trigger to expose a more significant problem with regard to both the national economy and the global economy. Addressing the US economy, years of globalization with the effect of fundamental products produced by overseas labor was bound to impact us in terms of foreign leverage, in other words, price hikes. Years of exceedingly low interest rates were bound to produce a stock market bubble, which we are in the midst of, along with a real estate bubble which we are also in the midst of, because real estate generally follows the stock market. People have no other viable means of investment other than foreign investment. But foreign investment is no longer reliable either. It's not a question of "pent up demand due to the pandemic," hence we have a shortage which leads to inflation. It's a question of necessities no longer produced in the US along with a labor shortage due to a liberal policy of de-incentivizing work. That and hiking the minimum wage federally, gas prices skyrocketing due to federal policy which in turn affects shipping, are also factors that are involved and would have been involved regardless of the pandemic, but at a more modest level. On top of it all, we've been borrowing money like mad with an enormous debt load that we keep hiking. We've been ignoring all these issues for years. And that's just preliminary. Thanks!!

 

[bave]

But in the services sector, small business is the driver as they necessarily possess the type of local tacit knowledge that gives them an edge productivity wise.

You mean like accounting, law, and medical services? Yea, those are all being heavily concentrated into large corporations.

• The number of people voluntarily quitting is hitting record numbers -- and even though it's a pandemic, you are not eligible for unemployment insurance if you quit your job.

In theory, yes, in practice no. We have had a number of employees over the last 6 months claim COVID concerns as a reason for successfully (after disputed) UE claims.

• Polls show that the biggest issues are concern about getting the virus (did'ja notice that there was a huge surge recently?) and concerns about child care. There's also some indications that low-wage employees don't enjoy being treated as punching bags by customers who are furious about things completely unrelated to the employee.

Then let me ask this, if you have a low wage employee who is struggling to pay the bills, what are they doing for money right now if it isn't UE?

• The US hasn't sent out a stimulus check in over 6 months.

• The days of an additional $600 or $300 in UI checks are over.

Sure, and the residual savings are still present.

• Cutting the extra UI from $600 to $300, and then $300 to $0, did not cause surges of people looking for work.

Agreed, why is that if all these low wage people are paycheck to paycheck? Where did they go?

Your theory doesn't explain what's actually happening, unless you think that most Americans can live for 2 years off of a $1400 stimulus check.

You are ignoring the thousands and thousands of other free dollars accumulated in various programs.

They are. However, tons of research shows that things like increases in minimum wages, or even recessions, don't actually have an impact on business failure rates.

Minimum wages don't have a large impact because the ~2% of the population making minimum wage is tipped. It just doesn't impact many people at all.

E.g. When you look at the survival rates of businesses since 1994, there's very little difference over time, regardless of the prevailing conditions. Roughly 1/2 of businesses were gone by year 5, regardless of whether that 10th year was in 1997, 2002, 2008, or 2011.

I'd add that merely saying "small businesses have it tougher!" doesn't mean that they should get a pass on underpaying, mistreating, disrespecting or otherwise undervaluing employees. It is, after all, a labor market, and right now employees are in demand. It is a bit crazy to assume that someone should work at Sal's Pizzeria, for the lowest possible wage and minimal (if any) benefits, out of the goodness of their hearts and because poor Sal needs a break.

I don't disagree, but then at the same time don't act shocked when you don't have a locally owned business and just have a Pizza Hut inside a Walmart.[/QUOTE]

 

[Visbek]

In theory, yes, in practice no. We have had a number of employees over the last 6 months claim COVID concerns as a reason for successfully (after disputed) UE claims.

Wow. Your conveniently unprovable anecdotes definitely trumps national statistics and actual research.

If you have a low wage employee who is struggling to pay the bills, what are they doing for money right now if it isn't UE?

The data indicates that they're quitting their old jobs, and taking better jobs; and many people (especially women) are staying home rather than go back to work and pay for child or elder care.

Again:
• The number of TANF recipients hasn't changed significantly
• The number of food stamp recipients is up -- but it's around the same as in 2017, and 5-6 million less than the peak from the 2008 recession
• Social Security outlays are rising at pretty much the same rate as they have since the mid-80s
• New and continuing UI claims are falling, and are way down -- 23 million at peak, down to 5 million by 1/1/2021, now at 2.6 million
• The program to distribute funds to renters who can't pay is mostly unused
• The number of people who can't pay their rent is only a few points below 2019 (https://www.nmhc.org/research-insight/nmhc-rent-payment-tracker/) -- and remember, mortgage holders were allowed to defer payments, but still have to pay the full mortgage
• The number of people in poverty stayed roughly the same as before the pandemic -- if people were stockpiling huge amounts of cash, shouldn't the number in poverty have fallen?

So you tell me, exactly what benefits do you think people received and/or are still getting? What is the Phantom Welfare Office where these people get benefits?

On a side note: Pilot programs of guaranteed income don't show that people just take the money and run. Getting a little extra cash per month stabilizes people, rather than discourages them from work. This should not be a huge surprise, given that merely being poor has a significant cognitive cost, which often leads to bad decisions that keeps the individual in poverty.

Sure, and the residual savings are still present.

What "residual savings?"

People who live paycheck-to-paycheck barely have any savings. Numerous (pre-pandemic) polls showed over and over that around half of Americans don't have enough cash to cover a $1000 cash emergency.

When you're on unemployment, you typically get half your take-home pay. The $600 bonus was huge, but that ended over a year ago. We also saw that the number of people in poverty stayed the same throughout the pandemic -- it didn't increase. And again, continuing UI claims are down 50% since the start of the year, meaning there just weren't a lot of people relying on the benefit which did increase the most during the pandemic.

Again, very little of this points to the likelihood that huge numbers of people are collecting that sweet, sweet, government green.

I don't disagree, but then at the same time don't act shocked when you don't have a locally owned business and just have a Pizza Hut inside a Walmart.

Y'know, I'm no fan of Walmart. However, IIRC the research shows that the alleged destructive powers of Walmart tend to be overblown. Most of the time, if Walmart puts a less efficient convenience store out of business, something else takes its place -- and because Walmart is so much cheaper, the locals have more money to spend on other things.

This also seems like one of those pointless threats, like "if fast food workers demand higher wages, then the companies will just automate!" That hilariously ignores the fact that those companies are automating everything they can anyway -- and it doesn't always result in a huge loss of jobs.

For example, the local supermarket near me added a bunch of self-checkout lanes. Did they axe a bunch of employees? A few, I'm sure, but they still have a lot of checkout staff. What's changed is that the lines are typically much shorter and faster than before, and I'm sure it's a little cheaper for the store. Of course, this also means they can afford to pay the remaining staff a little more -- but somehow, I doubt that happened....

 

[Aletheia]

My belief is that the pandemic was a trigger to expose a more significant problem with regard to both the national economy and the global economy. Addressing the US economy, years of globalization with the effect of fundamental products produced by overseas labor was bound to impact us in terms of foreign leverage, in other words, price hikes. Years of exceedingly low interest rates were bound to produce a stock market bubble, which we are in the midst of, along with a real estate bubble which we are also in the midst of, because real estate generally follows the stock market. People have no other viable means of investment other than foreign investment. But foreign investment is no longer reliable either. It's not a question of "pent up demand due to the pandemic," hence we have a shortage which leads to inflation. It's a question of necessities no longer produced in the US along with a labor shortage due to a liberal policy of de-incentivizing work. That and hiking the minimum wage federally, gas prices skyrocketing due to federal policy which in turn affects shipping, are also factors that are involved and would have been involved regardless of the pandemic, but at a more modest level. On top of it all, we've been borrowing money like mad with an enormous debt load that we keep hiking. We've been ignoring all these issues for years. And that's just preliminary. Thanks!!

I agree with part of this. We've been in multiple FED induced bubbles for decades now (every time there is a stock market blip, they flood the markets with liquidity). I am surprised we haven't seen an explosion in inflation earlier. I'm seeing comic collectibles and ephemera that were 5% annualized growth, going to multiples of 100% over the last few years. This chart never ceases to amaze me... *It's also interesting to note that we are overdue for recession. Likely, it will happen under Biden's watch, and he'll get the blame.

 

[Khayembii Communique]

I agree with part of this. We've been in multiple FED induced bubbles for decades now (every time there is a stock market blip, they flood the markets with liquidity). I am surprised we haven't seen an explosion in inflation earlier. I'm seeing comic collectibles and ephemera that were 5% annualized growth, going to multiples of 100% over the last few years. This chart never ceases to amaze me... *It's also interesting to note that we are overdue for recession. Likely, it will happen under Biden's watch, and he'll get the blame.

View attachment 67358038

1. We just had a recession
2. The money supply doesn't matter, all that matters is the supply / demand balance
3. An increase in asset prices isn't a "bubble"
4. Low rates aren't an issue
5. Your anecdotes are irrelevant

 

[highroller]

It's also interesting to note that we are overdue for recession. Likely, it will happen under Biden's watch, and he'll get the blame.

Wait…What?

 

[Aletheia]

1. We just had a recession
2. The money supply doesn't matter, all that matters is the supply / demand balance
3. An increase in asset prices isn't a "bubble"
4. Low rates aren't an issue
5. Your anecdotes are irrelevant

1. Yes. It was very mild and brief. Nowhere near the kind of recession that required a stimulus spike of that magnitude (that is an enormous outlier). Recession was nothing like what we would expect, given the background.
2. No. Are you saying real gdp growth matched the M1 spike in the chart I posted?
"Increasing the money supply faster than the growth in real output will cause inflation. The reason is that there is more money chasing the same number of goods. Therefore, the increase in monetary demand causes firms to put up prices."
3. The increase in housing assets, stock assets, and capital assets across the board have been in a bubble for a long time now.
4. Yes, low rates absolutely are an issue. The FED should have been raising rate targets as rates have been too low for far too long and assets have been soaring.
5. None of your comments are supported by any facts or anecdotes -- so, no, you haven't convinced me of anything (other than the recession fact, which I double checked as it was barely visible as were its effects).

 

[Khayembii Communique]

1. Yes. It was very mild and brief. Nowhere near the kind of recession that required a stimulus spike of that magnitude (that is an enormous outlier). Recession was nothing like what we would expect, given the background.
2. No. Are you saying real gdp growth matched the M1 spike in the chart I posted?
"Increasing the money supply faster than the growth in real output will cause inflation. The reason is that there is more money chasing the same number of goods. Therefore, the increase in monetary demand causes firms to put up prices."
3. The increase in housing assets, stock assets, and capital assets across the board have been in a bubble for a long time now.
4. Yes, low rates absolutely are an issue. The FED should have been raising rate targets as rates have been too low for far too long and assets have been soaring.
5. None of your comments are supported by any facts or anecdotes -- so, no, you haven't convinced me of anything (other than the recession fact, which I double checked as it was barely visible as were its effects).

Asset prices increased because rates went down. It's basic valuation math. That's not a bubble, that's just an increase in asset values. There's a massive difference between an asset class increasing in value generally, and there being a bubble. It seems like you don't understand how interest rates affect the economy.

The money supply just doesn't matter. Biden could mint a $100 trillion coin and put it under his pillow, the money supply would spike and it would have zero impact on the economy. Money only matters as it circulates, and it only circulates when it's spent for goods and services. All that matters when it comes to inflation are demand / supply dynamics over time. Your quote is wrong because it misses the basic fact when there is more spending, there is more investment in expansion of supply to meet that demand. The past decade of massive money supply expansion would've caused inflation. It didn't.

 

[Aletheia]

Asset prices increased because rates went down. It's basic valuation math. That's not a bubble, that's just an increase in asset values. There's a massive difference between an asset class increasing in value generally, and there being a bubble. It seems like you don't understand how interest rates affect the economy.

The money supply just doesn't matter. Biden could mint a $100 trillion coin and put it under his pillow, the money supply would spike and it would have zero impact on the economy. Money only matters as it circulates, and it only circulates when it's spent for goods and services. All that matters when it comes to inflation are demand / supply dynamics over time. Your quote is wrong because it misses the basic fact when there is more spending, there is more investment in expansion of supply to meet that demand. The past decade of massive money supply expansion would've caused inflation. It didn't.

I think your analogy of minting a 100trillion coin is way too simplistic.

And I disagree that money supply has no impact on inflation. Regarding basic economic math, do you know the equation of exchange (MV = PY)? Well money supply is a direct factor of that basic equation effecting inflation (price level changes). The only reason we don't see overall inflation soaring, is arguably, velocity of money has stagnated. When the FED stimulates the banking industry, the money is not sitting there like a coin. I would argue that much of that money has found it's way into investment vehicles of the wealthy like real estate, collectibles, and stocks. I was speaking of general observation, when I say things like investors I know are falling all over themselves driving up the prices of real estate property. Or companies with access to the easy money policies are using the money to buy back their stocks, driving up prices for investors and owners, not employees.

When we simplify inflation using metrics like core CPI, that doesn't really reflect much of what I'm saying. I'm just arguing that things that we need like buying a house are going way up beyond historical norms, is a reflection of the huge money stimulus and easy money policies of the last few years. That doesn't mean that the economy in general is going to look overheated, but we can feel it's effects.

 

[ttwtt78640]

The important question is:

"Will it last?"

Yes, so long as energy costs continue to increase. There seems to be significant ‘environmentalist’ pressure to make that happen. Energy is not only required to make X, it is also required to get X from wherever it is made to the customer.

 

[Logophile]

Yes, so long as energy costs continue to increase. There seems to be significant ‘environmentalist’ pressure to make that happen. Energy is not only required to make X, it is also required to get X from wherever it is made to the customer.

The realities are to pursue energy, to be precise, fossil fuel limits during a pandemic is poor judgment. The pipeline building should resume, the US carbon initiatives and China's environmental measures should be - in the short run - shelved until the pandemic is globally under control. Now is not the time to heap more economic stress on the global population. We need to address the environmental problems, but we need to be stronger to do so. Thanks!!

 

[highroller]

The realities are to pursue energy, to be precise, fossil fuel limits during a pandemic is poor judgment. The pipeline building should resume, the US carbon initiatives and China's environmental measures should be - in the short run - shelved until the pandemic is globally under control. Now is not the time to heap more economic stress on the global population. We need to address the environmental problems, but we need to be stronger to do so. Thanks!!

The best time to quit smoking is before you’re dead. Saying we need to have a stronger economy before we start the switchover is irrational. 15 years ago, it was economy couldn’t take the hit, now it’s the economy is too weak. There will always be an excuse not to be healthy.

 

[ttwtt78640]

The realities are to pursue energy, to be precise, fossil fuel limits during a pandemic is poor judgment. The pipeline building should resume and the US carbon initiatives and China's environmental measures should be - in the short run - shelved until the pandemic is globally under control. Now is not the time to heap more economic stress on global population. We need to address the environmental problems, but we need to be stronger to do so. Thanks!!

Those who recognize that ‘alternative’ energy is (currently) more costly than fossil fuel energy must try to eliminate that (consumer preference) obstacle ‘by any means necessary’. It’s easier to raise the cost of fossil fuels than to reduce the cost of its preferred replacement(s). Adding a carbon tax and using the proceeds to subsidize alternatives seems to be the plan.

 

[highroller]

Those who recognize that ‘alternative’ energy is (currently) more costly than fossil fuel energy must try to eliminate that (consumer preference) obstacle ‘by any means necessary’. It’s easier to raise the cost of fossil fuels than to reduce the cost of its preferred replacement(s). Adding a carbon tax and using the proceeds to subsidize alternatives seems to be the plan.

Do you remember “acid rain”?

Why should governments just allow environmental degradation?

 

[ttwtt78640]

Do you remember “acid rain”?

Why should governments just allow environmental degradation?

Can you show us that we did not reach sufficient reductions of “acid rain”?

Overall, the program's cap and trade program has been successful in achieving its goals. Since the 1990s, SO2emissions have dropped 40%, and according to the Pacific Research Institute, acid rain levels have dropped 65% since 1976.[37][38] Conventional regulation was used in the European Union, which saw a decrease of over 70% in SO2 emissions during the same time period.[39]

In 2007, total SO2 emissions were 8.9 million tons, achieving the program's long-term goal ahead of the 2010 statutory deadline.[40]

In 2007 the EPA estimated that by 2010, the overall costs of complying with the program for businesses and consumers would be $1 billion to $2 billion a year, only one fourth of what was originally predicted.[37] Forbes says: "In 2010, by which time the cap and trade system had been augmented by the George W. Bush administration's Clean Air Interstate Rule, SO2 emissions had fallen to 5.1 million tons."[41]

Acid rain - Wikipedia

en.wikipedia.org

 

[Logophile]

Those who recognize that ‘alternative’ energy is (currently) more costly than fossil fuel energy must try to eliminate that (consumer preference) obstacle ‘by any means necessary’. It’s easier to raise the cost of fossil fuels than to reduce the cost of its preferred replacement(s). Adding a carbon tax and using the proceeds to subsidize alternatives seems to be the plan.

And for the moment, it's a very foolish plan. With inflation on the rise, a labor shortage, winter around the bend, shortages of goods and my understanding is now food, global leaders should see reason. Renewable energy is our future, but a population struggling to make ends meet is not going to usher that future in. Instead, it will resort to whatever means necessary, legal or not, to exist, which could be more harmful to the environment and other species. Right now, we need to address inflation and shortages and get the pandemic under control. We already have civil unrest in many nations including our own. There's no point in adding stresses. Thanks!!

 

[Khayembii Communique]

I think your analogy of minting a 100trillion coin is way too simplistic.

And I disagree that money supply has no impact on inflation. Regarding basic economic math, do you know the equation of exchange (MV = PY)? Well money supply is a direct factor of that basic equation effecting inflation (price level changes). The only reason we don't see overall inflation soaring, is arguably, velocity of money has stagnated. When the FED stimulates the banking industry, the money is not sitting there like a coin. I would argue that much of that money has found it's way into investment vehicles of the wealthy like real estate, collectibles, and stocks. I was speaking of general observation, when I say things like investors I know are falling all over themselves driving up the prices of real estate property. Or companies with access to the easy money policies are using the money to buy back their stocks, driving up prices for investors and owners, not employees.

When we simplify inflation using metrics like core CPI, that doesn't really reflect much of what I'm saying. I'm just arguing that things that we need like buying a house are going way up beyond historical norms, is a reflection of the huge money stimulus and easy money policies of the last few years. That doesn't mean that the economy in general is going to look overheated, but we can feel it's effects.

If you think my example of the coin is simplistic then you didn't get it. Minting such a coin would cause the money supply to increase by $100tn which wouldn't have any impact on the economy. The entire point of the example is to show that money has no impact unless it is being put into the economy, and thus looking at the money supply is meaningless.

If you think the velocity of money "stagnating" is an issue then you don't understand how it's calculated (I'll give you a hint: the amount of money supply formulaicly impacts the velocity calculated).

Fed purchases reduce interest rates which increases investment asset prices given the risk free rate goes down - has nothing to do with the supply of money. Real estate is incredibly sensitive to shifts in the risk free rate given they're extremely low rates due to the fact that they're heavily collateralized so it's blatantly obvious that real estate prices would increase dramatically with a commensurate lowering of rates. And to claim that the rise in housing prices is due to inflation, goes to show that you're not really clear on the fundamentals of what you're discussing or what inflation actually is.

Stock buybacks have no meaningful impact on stock prices so again it seems like you may not have an understanding of what you're discussing here.

 

[Khayembii Communique]

And for the moment, it's a very foolish plan. With inflation on the rise, a labor shortage, winter around the bend, shortages of goods and my understanding is now food, global leaders should see reason. Renewable energy is our future, but a population struggling to make ends meet is not going to usher that future in. Instead, it will resort to whatever means necessary, legal or not, to exist, which could be more harmful to the environment and other species. Right now, we need to address inflation and shortages and get the pandemic under control. We already have civil unrest in many nations including our own. There's no point in adding stresses. Thanks!!

Inflation isn't "on the rise". One would need to be braindead to not grasp the fact that comparing 2021 figures to 2020 is meaningless. Two year CAGR for September 2021 CPI was 3.3% which isn't unreasonable.

 

[ttwtt78640]

If you think my example of the coin is simplistic then you didn't get it. Minting such a coin would cause the money supply to increase by $100tn which wouldn't have any impact on the economy. The entire point of the example is to show that money has no impact unless it is being put into the economy, and thus looking at the money supply is meaningless.

If you think the velocity of money "stagnating" is an issue then you don't understand how it's calculated (I'll give you a hint: the amount of money supply formulaicly impacts the velocity calculated).

Fed purchases reduce interest rates which increases investment asset prices given the risk free rate goes down - has nothing to do with the supply of money. Real estate is incredibly sensitive to shifts in the risk free rate given they're extremely low rates due to the fact that they're heavily collateralized so it's blatantly obvious that real estate prices would increase dramatically with a commensurate lowering of rates. And to claim that the rise in housing prices is due to inflation, goes to show that you're not really clear on the fundamentals of what you're discussing or what inflation actually is.

Stock buybacks have no meaningful impact on stock prices so again it seems like you may not have an understanding of what you're discussing here.

It depends on how that (new) money is put into the economy. If it increases production (e.g. infrastructure spending) then it is not likely to create inflation, but if it replaces production (e.g. paying folks not to work) then it is likely to create inflation.

 

[highroller]

Can you show us that we did not reach sufficient reductions of “acid rain”?

Acid rain - Wikipedia

en.wikipedia.org

You missed the pint of the post. There was a problem with pollution and we reacted and reduced it. We didn’t cry about the economy, and we solved the problem. Today, it would be impossible to solve the problem of acid rain.

 

[Visbek]

Inflation isn't "on the rise". One would need to be braindead to not grasp the fact that comparing 2021 figures to 2020 is meaningless. Two year CAGR for September 2021 CPI was 3.3% which isn't unreasonable.

Yep. Or, we can look at monthly inflation, and see how it peaked in June, and is currently close to normal.



Not to mention that moderate inflation can be beneficial for a recovery, because it encourages people to spend right now, rather than wait a year while goods and services get more expensive. Consumer spending is up and hitting record highs, so it is doing exactly that -- it's just unfortunate that this is happening while supply chains are still slowed down.

Meanwhile, SSI benefits (and AFAIK, many other benefits) are increased in tandem with inflation, and personal savings rates are above average. There's indicators that Americans are switching jobs to get higher pay. GDP is up. In areas where the pandemic is mostly under control, life is getting back to normal. It sure looks like inflation is doing very little actual damage to the economy.

I.e. A lot of the freak-outs over inflation are hyperbolic, unnecessary, and driven by partisan opposition to policies that have no effect on and/or nothing whatsoever to do with inflation.

 

[Khayembii Communique]

Yep. Or, we can look at monthly inflation, and see how it peaked in June, and is currently close to normal.

View attachment 67358083

Not to mention that moderate inflation can be beneficial for a recovery, because it encourages people to spend right now, rather than wait a year while goods and services get more expensive. Consumer spending is up and hitting record highs, so it is doing exactly that -- it's just unfortunate that this is happening while supply chains are still slowed down.

Meanwhile, SSI benefits (and AFAIK, many other benefits) are increased in tandem with inflation, and personal savings rates are above average. There's indicators that Americans are switching jobs to get higher pay. GDP is up. In areas where the pandemic is mostly under control, life is getting back to normal. It sure looks like inflation is doing very little actual damage to the economy.

I.e. A lot of the freak-outs over inflation are hyperbolic, unnecessary, and driven by partisan opposition to policies that have no effect on and/or nothing whatsoever to do with inflation.

Conservatives have to harp on inflation constantly because it's the only way they can argue against expanding deficit spending. The level of delusion / dishonesty one must have to argue that inflation is a problem (much less hyperinflation like many here would try to use as an argument as well) is pretty insane, considering that inflation hasn't been a problem for the majority of most Americans' lives that are alive today.

 

[ttwtt78640]

You missed the pint of the post. There was a problem with pollution and we reacted and reduced it. We didn’t cry about the economy, and we solved the problem. Today, it would be impossible to solve the problem of acid rain.

Perhaps, you missed the point. That solution did not require the energy user (individual consumer) to buy anything new (and more expensive) to replace what they already had.

 

[highroller]

Perhaps, you missed the point. That solution did not require the energy user (individual consumer) to buy anything new (and more expensive) to replace what they already had.

Yes, it did. It required the end-user to buy more expensive fuel. Nobody notices because it hasn’t affected our lives.

Nobody will be required to buy electric cars; it’s just a price of fossil fuels would go up, and electricity would become a reasonable alternative (which it already has).