Well since the end of the covid lockdown we have had quite a boost to inflation. Below is a list of the causes of our present inflation. Please pick the ones you feel have had the greatest effect.
What date are you using for that (bolded above) event?
These things are not major drivers of inflation:
- Biden's policies
- The bipartisan covid relief bill
- FED monetary policies
- Pent up demand from the lockdown
- Supply chain problems related to covid lockdowns (China)
The biggest driver of inflation overall is pent-up demand after COVID. The biggest drivers of the extra inflation in the United States, above and beyond the inflation bump everyone else got, is the Fed being slow to raise interest rates and our yawning deficit in 2021.
- Profit taking by our corporations
- Oil prices
- PUTIN'S WAR
Profits. There's one tiny group of people that are able to raise prices for what they provide. 'Everybody knows' that some of them, especially the larger ones, will use any and every crisis as cover for raising prices so they can increase profits, thereby transferring more wealth from others to themselves. Are the other things factors? Yes.
I chose all of the above, though the biggest drivers have been supply chain issues and oil prices.Well since the end of the covid lockdown we have had quite a boost to inflation. Below is a list of the causes of our present inflation. Please pick the ones you feel have had the greatest effect.
Inflation 'post' covid is a global phenonenom. The question isn't - 'did Biden cause it?' The question is - 'could he do more to ease it?'
The causes are pent up demand, higher than normal saving levels, strong house price growth, and covid ravaged supply chains from production and inventory through to shipping and delivery.
The problem facing Biden, and other leaders, is to judge when to pull the 'interest rate card' and other monetary tightening moves to contain inflation. With the country still in covid recovery mode the fear is that tightening too early could trigger a collapse in confidence when the economy is still very vulnerable. Some short term inflation is the price being paid for taking a safer economic approach. Inflation is also taking $trillions off the effective US debt, so a little upside from that as well.
Other similarly structured countries have already started the money supply tightening process to curb inflation, but whether they or Bidens team have it right isn't obvious yet. Low unemployment is a key 'trigger' for supporting tighter monetary policy, so expecting to see something more happening soon if employment reports stay strong. Then of course some people will moan that the cost of all the money they borrowed has gone up due to Bidens incompetence .........
The choice to stimulate more demand post shutdown under supply constraints was a huge blunder. Biden didn't want a repeat of Obama's lethargic recovery and overcompensated.
Um, the CARES and ARP in 2020 and 2021 were primarily to shore up income declines, and for many were an absolute lifeline. Further, they did not make up for the income declines. To characterize them as "demand stimulus" is disingenuous..The choice to stimulate more demand post shutdown
Yes, I knew that when I wrote the post. Most developed countries have a reserve bank that is mostly independent, but I believe that they are still mostly reactive to the govts leads.The only thing you have wrong is Biden does not control the Fed. If you substitute Fed for Biden I agree.
You forgot systemic corporate gouging:Well since the end of the covid lockdown we have had quite a boost to inflation. Below is a list of the causes of our present inflation. Please pick the ones you feel have had the greatest effect.
The ARP was hotly contested at the time, with the admin scoffing at the idea it could lead to inflation - and Biden himself saying "you can't do too much, you can only do to little." They were wrong.Um, the CARES and ARP in 2020 and 2021 were primarily to shore up income declines, and for many were an absolute lifeline. Further, they did not make up for the income declines. To characterize them as "demand stimulus" is disingenuous..
Anyone that believes a piece of legislation causes inflation before monies are dispersed shouldn't be discussing macroeconomics. You are basing your argument on ignorant rhetoric without looking at the changes in cpi or the timing of the checks. CPI bottomed out in May of 2020, and increased as the economy opened after the ending of the recession in April. The checks for the ARP were not even in the mail until March of 2021, a YEAR later.The ARP was hotly contested at the time, with the admin scoffing at the idea it could lead to inflation - and Biden himself saying "you can't do too much, you can only do to little." They were wrong.And so are you.
Uh, both, the Trump CARES and the Biden ARP issued checks to all. If the argument is that they caused inflation because those that didn't need them caused inflation, there is an argument against that. The propensity to spend is greater for lower quintiles, and the evidence to support this historical econ principle is that median and high quintiles either saved or paid down debt with their checks.If it were to "primarily shore up income declines" it would have provided targeted aid rather than a shotgun approach (good lord, they were mad that the direct payment checks were "only" $1,400!!) the purpose of which was to provide a Keynsian macroeconomic boost.
Nobody made any such claim.Anyone that believes a piece of legislation causes inflation before monies are dispersed shouldn't be discussing macroeconomics.
Pretty much everyone understands by now that the economy was already recovering before the ARP went into effect. It unecessarily fueled demand, greatly exacerbating inflation.You are basing your argument on ignorant rhetoric without looking at the changes in cpi or the timing of the checks. CPI bottomed out in May of 2020, and increased as the economy opened after the ending of the recession in April. The checks for the ARP were not even in the mail until March of 2021, a YEAR later.
Yes, we had already passed a bunch of spending bills. A third behemoth bill was completely unecessary, as many pointed out at the time.Uh, both, the Trump CARES and the Biden ARP issued checks to all. If the argument is that they caused inflation because those that didn't need them caused inflation, there is an argument against that. The propensity to spend is greater for lower quintiles, and the evidence to support this historical econ principle is that median and high quintiles either saved or paid down debt with their checks
Um, YOU did, don't you even remember what you wrote?Nobody made any such claim (that legislation causes inflation before monies are dispersed).
As usual, a meaningless argument, "recovering" means "not in the worst GDP decline ever" (2Q2020, 6 months prior), and lets remember how Fox covered the 4Q2020 report:Pretty much everyone understands by now that the economy was already recovering before the ARP went into effect.
Are you still trying support an argument with nothing but unsupported revisionist bullshit and the already debunked idea that inflation was caused by stimulus not even dispersed?Yes, we had already passed a bunch of spending bills. A third behemoth bill was completely unecessary, as many pointed out at the time.
1. Corporations, not the government, are running the country.
2. Greed.
3. Covid.
Excellent informative post!You forgot systemic corporate gouging:
BIG by Matt Stoller
The history and politics of monopoly power. Click to read BIG by Matt Stoller, a Substack publication with hundreds of thousands of subscribers.mattstoller.substack.com
Price gouging the real cause of Inflation (Guest viewpoint)
What has gone underreported in the American press is that a significant amount of the inflation American households are experiencing is simply strategic behavior of businesses to increase prices in order to increase profits.www.masslive.com
The Dirty Secret of Inflation: Corporations Are Jacking Up Prices and Profits
Democrats are failing to speak to the realities of the economic moment—and it could cost them in the midterms.www.thenation.com