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Comment by cabraca | Hacker News Reader

yeah, wage adjustment will bring inflation out of control. Not the tax breaks for companies, not the 2 trillion dollar stock market bailout in 2020. It's the people getting a 2 dollar wage increase thats driving the inflation. /s

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There is no question the 4 trillon (not 2) money printing has been the main driver of inflation. The question is not so much whether inflation has been created, it has, and has been in the CPI index for a year now. The question now is whether we are starting the cycle of price increase => wage increase => price increase, i.e. whether we will get inflation also next year and the year after, etc. Breaking that cycle is ugly business.

Too much money printed at the top.

What should wage workers do except demand more at the bottom?

If we don't demand higher wages the the printed dollars just end up among the really rich.

Wage workers can and should demand more. When we're at the point where rising wages lead to a spiral of inflation, there's lots of other problems in the economy, so there's no point in wage workers not demanding more.

Of course it's not wage increases that's causing inflation. But once we're at a point where even wage increases lead to inflation, then we're in a really bad place.

Hopefully we can cool off before getting there. Plus the government can't really affect wages. I'm surprised nobody has suggested increasing tax rates as a way to cool the economy off, but that's political, so probably much more difficult.

> But once we're at a point where even wage increases lead to inflation, then we're in a really bad place.

Why is that bad? Given the asset inflation it is only anticipated wages catch up or assets crash.

That is what you would expect for CPI inflation. Bailout for companies and the rich would not increase consumption of e.g. food or gas much; newly-printed money going to consumers via whatever means would, though. Bailouts for the "rich" would just increase prices of assets, so the only CPI impact you'd expect would be in housing, maybe.

It's not like printing money and "helping people" has not been done a bunch in the past - it always works out the same way, to a different extent depending on other circumstances. To some extent, e.g. minimum wage laws could be beneficial... inflation+redistribution where the gains in wages for the poorest outstrip the resulting inflation that only affects those whose earnings didn't increase because they were already well above the new threshold, I guess? According to this article, we appear to be well beyond that point.

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