inflation

[marshwiggle]

Awright you gots me.   I am for all intents in purpose a socialist, when it comes to government regulation of the economy.   

Why are there no longer basically any countries that call themselves socialist? (Except maybe Cuba and/or North Korea and/or China)? Why didn't all of those people in communist socialist countries realize how good they had it? (None of the countries uninformed Americans call "socialist" in Europe or elsewhere are remotely "socialist"; they just have more sane government programs.)

[apl68]

As bad as inflation is in North America, it is running far worse in many places.  We're getting disturbing reports of very high food prices in the Middle East and elsewhere.  That should be a matter of concern for everybody.

[dismalist]

As bad as inflation is in North America, it is running far worse in many places.  We're getting disturbing reports of very high food prices in the Middle East and elsewhere.  That should be a matter of concern for everybody.

Careful, that's a change in relative prices. Food price hikes are caused by high oil prices and Ukraine. Inflation -- the change in the overall price level -- varies from country to country, Jordon, e.g., had 3.6% year-on-year in April of this year. In contrast, Egypt had 12.1% in March.

It's not food prices that drive inflation, it's central banks printing money to finance government deficits.

[kaysixteen]

Ok, now I admit I did use the term 'socialist' as a bit of a trollish line, but I am at pains to point out (as I think I have probably done somewhere here or in the old fora before), that 'socialism' is essentially a meaningless buzzword.   As Lawrence O'Donnell notes, there is no such thing as 'socialism' exactly, there is a plethora of 'socialisms' ( I am paraphrasing him here), but he specifically well-noted that there is 'good socialism' and 'bad socialism'.   Also, because most Americans over 30-ish are reflexively hostile to 'socialism', many people, esp conservatives, redefine those socialist programs that benefit themselves as something other than socialism, in order to keep on lobbying the term negatively against those programs they hate, most of which do not benefit them.   One such program that they do like is programs that give the Amazons of the world exemptions from local property taxes and the like, for instance.

[Anon1787]

Inflation is always and everywhere a monetary phenomenon.

The conventional view is that the Federal Reserve must raise nominal interest rates above the inflation rate to reduce inflation and they're not even close to doing that yet.

If you want to lower the relative price of specific goods like food and energy, you need to encourage more supply (and/or reduce demand), and the opposite happens with price controls. Reducing regulation and taxation (and increasing subsidies) on (marginal) producers, NOT consumers, would likely increase supply the fastest. You could also try to reduce demand like was done back in the 1970s by imposing a 55 mph highway speed limit and getting people and businesses to set their thermostats higher in the summer and lower in the winter, but those measures weren't very popular.

[dismalist]

First part is good, Anon.

As for relative prices, or individual prices, a higher price is an incentive to supply more.

One doesn't want to reduce demand for any particular commodity. Think reducing the speed limit to zero; that'll reduce demand for gas!

Reducing one price -- say gasoline -- by reducing the excise tax on it implies the tax money is missing elsewhere. Typically, future generations make up for it. That's why it's popular. :-)

[marshwiggle]

Ok, now I admit I did use the term 'socialist' as a bit of a trollish line, but I am at pains to point out (as I think I have probably done somewhere here or in the old fora before), that 'socialism' is essentially a meaningless buzzword.   As Lawrence O'Donnell notes, there is no such thing as 'socialism' exactly, there is a plethora of 'socialisms' ( I am paraphrasing him here), but he specifically well-noted that there is 'good socialism' and 'bad socialism'.   Also, because most Americans over 30-ish are reflexively hostile to 'socialism', many people, esp conservatives, redefine those socialist programs that benefit themselves as something other than socialism, in order to keep on lobbying the term negatively against those programs they hate, most of which do not benefit them.   

Again, "those socialist programs" that exist in all kinds of countries that aren't socialist aren't specifically "socialist" programs. In Canada, the three main *national political parties; Conservative (centre-right), Liberal (centre-left), and NDP (left). The NDP have NEVER formed the government nationally (although have in some provinces), and the federal government has  historically gone back and forth between Liberal and Conservative (i.e. centre-left and centre-right). Things like universal healthcare are supported by all parties. UNIVERSAL HEALTHCARE IS NOT A SOCIALIST POLICY; IT'S THE NORM IN MOST DEVELOPED COUNTRIES.

The only way to call all kinds of programs "socialist" is if you define the USA, being the outlier, as the only NON-socialist country in the developed world. (In which case, if "socialist" just means "not like in the USA", then it's a pretty much useless term.)



(*There are some regional variations, such as in Quebec)

[Anon1787]

First part is good, Anon.

As for relative prices, or individual prices, a higher price is an incentive to supply more.

One doesn't want to reduce demand for any particular commodity. Think reducing the speed limit to zero; that'll reduce demand for gas!

Reducing one price -- say gasoline -- by reducing the excise tax on it implies the tax money is missing elsewhere. Typically future generations. That's why it's popular. :-)

I agree that higher prices provide an incentive to supply more. Higher prices also discourage demand, so demand is discouraged indirectly with lower speed limits, which admittedly is not as clear and efficient a signal as a higher price. My view is that if there is to be a government policy to lower the prices of food, energy, and housing it should be focused on the supply side.

Ok, now I admit I did use the term 'socialist' as a bit of a trollish line, but I am at pains to point out (as I think I have probably done somewhere here or in the old fora before), that 'socialism' is essentially a meaningless buzzword.   As Lawrence O'Donnell notes, there is no such thing as 'socialism' exactly, there is a plethora of 'socialisms' ( I am paraphrasing him here), but he specifically well-noted that there is 'good socialism' and 'bad socialism'.   Also, because most Americans over 30-ish are reflexively hostile to 'socialism', many people, esp conservatives, redefine those socialist programs that benefit themselves as something other than socialism, in order to keep on lobbying the term negatively against those programs they hate, most of which do not benefit them.   One such program that they do like is programs that give the Amazons of the world exemptions from local property taxes and the like, for instance.

Classic socialism involves government (public) ownership of the means of production: all of it or major industries. It becomes blurry with the liberal welfare/administrative state. Take health care, which is now a very large industry in OECD countries. Britain's NHS is socialist because the government owns and operates the health care service while government single payer is part socialist because government displaces private health insurance (and as single payer exercises great influence over health care) but leaves provision of most health care services to the private sector. The distinction likewise becomes blurry when the goal is to provide cradle to grave care (e.g., "The Life of Julia") with an administrative nanny state.

[dismalist]

Classic socialism involves government (public) ownership of the means of production: all of it or major industries. It becomes blurry with the liberal welfare/administrative state. Take health care... .

Absolutely, Anon, and to Marsh, too:

No one pursues classic socialism -- public ownership of the means of production -- anymore. [Cuba, North Korea, Venezuela, and who knows who else are beyond the pale].

The programs of the political left that amount to insurance -- health, old age, accident, unemployment, Bismarck's laws of the 1880's, and more recently aid to the poor, have all been institutionalized in various ways in rich countries, and yes, even the United States. [Don't let the rhetoric fool.] It's just the methods are different. This is European social democracy, a reaction against communism, that has been realized, not classic socialism.

[Permit me to insert a personal observation here: Living in a certain European country for a long time, I was a pronounced free marketeer. Living in another for a few years, I was a radical right wing usurpist. Returning to the United States, I became slightly left of center compared to the population as a whole (not compared to college faculty, of course). And I never changed my views!]

Because the social democratic agenda has more or less been fulfilled, and the ideology has run its course, parties of the left have to find new support groups, or interest groups, and of course, a new ideology to bind them together. Hence the global warmingism, racialism and sexism of narrow definition on the part of the newest left. The non favored are relegated to the right and denounced as populists, something the Left once wished it were.

There, I feel so much better! :-)

[Hibush]

Inflation is always and everywhere a monetary phenomenon.

The conventional view is that the Federal Reserve must raise nominal interest rates above the inflation rate to reduce inflation and they're not even close to doing that yet.

If you want to lower the relative price of specific goods like food and energy, you need to encourage more supply (and/or reduce demand), and the opposite happens with price controls. Reducing regulation and taxation (and increasing subsidies) on (marginal) producers, NOT consumers, would likely increase supply the fastest.

The Fed eased up a lot on "printing money", so that should cool the economy and inflation somewhat.

My sense on US inflation is that people felt deprived after Covid and now want to buy a whole lot of stuff. The stuff-makers in China aren't able to crank up the flow fast enough so that stuff costs more. But also expensive stuff. Somewhat fancy cars have an extra dealer markup larger than a year of PhD stipend. The demand is sharp. On the other side, unemployment is really low. Workers have some pricing power for a change. Even lowly professors are skipping to better schools or even non-schools for better pay and working conditions. And a lot of people, even after this spring, have a strong enough retirement fund that they are leaving work behind. Because the economy is strong, not because it is weak.

[dismalist]

My sense on US inflation is that people felt deprived after Covid and now want to buy a whole lot of stuff.

They want to buy now, yes, but it's not about feeling deprived. It's about the demand for holding money, holding not spending. The huge, I mean huge, increase in the supply of money during covid did not immediately result in inflation because the cash was not spent. It was held, on account everybody was scared out of their brains. Now that covid is over, that cash is being spent. Hence inflation.

[Hibush]

My sense on US inflation is that people felt deprived after Covid and now want to buy a whole lot of stuff.

They want to buy now, yes, but it's not about feeling deprived. It's about the demand for holding money, holding not spending. The huge, I mean huge, increase in the supply of money during covid did not immediately result in inflation because the cash was not spent. It was held, on account everybody was scared out of their brains. Now that covid is over, that cash is being spent. Hence inflation.

Good perspective. The money supply is definitely up, if unevenly. Deprived vs scared-out-of-brain probably also unevenly distributed.

[lightning]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

That new car? Nope. I'm keeping my old car until it dies, even though I can afford a new car. The incidental impulse items at the cash register? I used to get them quite a bit. Now I take a pass. The semi-daily drive-through coffee? Nope. I'll brew it my damn self when I get home. Family vacation? I drained all my travel miles to pay for travel for this year's (and next year's family vacation) before those bastards at the airlines jack up the rewards thresholds even further.

Yes, I still have to buy food. Regarding food, I'm eating less & buying less food--out of spite, so I'm losing weight!!  I'm cooking more at home.

I can't believe I'm saying this, but inflation (in addition to the pandemic) has taught me that I've been really dumb with my money with some things, and I've realized that I can do without a lot of things, and I'm just as happy.

Yes, I still have to buy gas, but I'm driving less & driving smarter.

So, I partially retreated as a consumer, from the economy, mainly out of protest. I'm learning that I don't need to buy & do nearly as much stuff as I thought I needed, in order to be happy. This plus the pandemic really clarified what is really important.

Yeah, I know. People like me are not good for the economy. Fvck it. Fvck 'em all. Let's all stop buying and doing stupid s**t and let's collectively sort out the useless stuff in our society and lives. It's time to continue the reboot that the pandemic started.

[hmaria1609]

Package sizes are shrinking too:
https://wtop.com/asia/2022/06/no-youre-not-going-crazy-package-sizes-are-shrinking/
Posted on WTOP online 6/8/22

[dismalist]

I'm now NOT buying stuff that I don't need to buy--not because I can't afford it, but out of spite.

That new car? Nope. I'm keeping my old car until it dies, even though I can afford a new car. The incidental impulse items at the cash register? I used to get them quite a bit. Now I take a pass. The semi-daily drive-through coffee? Nope. I'll brew it my damn self when I get home. Family vacation? I drained all my travel miles to pay for travel for this year's (and next year's family vacation) before those bastards at the airlines jack up the rewards thresholds even further.

Yes, I still have to buy food. Regarding food, I'm eating less & buying less food--out of spite, so I'm losing weight!!  I'm cooking more at home.

I can't believe I'm saying this, but inflation (in addition to the pandemic) has taught me that I've been really dumb with my money with some things, and I've realized that I can do without a lot of things, and I'm just as happy.

Yes, I still have to buy gas, but I'm driving less & driving smarter.

So, I partially retreated as a consumer, from the economy, mainly out of protest. I'm learning that I don't need to buy & do nearly as much stuff as I thought I needed, in order to be happy. This plus the pandemic really clarified what is really important.

Yeah, I know. People like me are not good for the economy. Fvck it. Fvck 'em all. Let's all stop buying and doing stupid s**t and let's collectively sort out the useless stuff in our society and lives. It's time to continue the reboot that the pandemic started.

Ah, yes lightning, the Law of Demand. We're all the same.

The economy? The economy is us! So fxxk it is the theoretically sanctioned response.