San Francisco has the notion that drugged up people out of their mind have the ability and the right to live in a civilized society..
Rule by common sense, not ideology.
3,433 karma · joined September 27, 2010
Rule by common sense, not ideology.
That’s why they attacked Pearl Harbor in the first place: to neutralize the US navy threat in the Pacific while seeking for new oil sources down South.
They were at war with many countries, but they weren’t at war with the US specifically up until that point.
And by the way the US sold oil to Japan to profit from their war machine in Russia, Manchuria and China. It wasn’t until the very end that they stopped selling it.
It is true that defense money gets redistributed across the population and into the economy, but that has always been the case and inflation was in check.
The fact that you are insinuating that this has anything to do with the current inflation problem is misleading. In 2023 we are dealing with the fallback of Covid fiscal policies, not defense spending.
That plus...the supply chain bottlenecks were real, and affect the whole world. Supply chain was the focus of the Fed until late 2021 when they realized they couldn't wait for the supply chain to fix itself anymore, and they started to lower demand by increasing the interest rates. The ECB followed the course.
The fact that we focused so much on lowering US demand in 2022-2023 by increasing interest rates, should not distract us from the fact that supply chain bottlenecks are the real issue we are trying to fix (by lowering demand, most of which spiked up because of fiscal policy after Covid), which is a global problem. Jerome Powell was not wrong in saying that inflation was transitory, he was just too optimistic on the time it would take to heal the supply chain.
It may have been, but that was not reflected in the CPI, and we are talking about inflation as it is officially recorded in the CPI reports. The CPI inflation didn't spike up until early 2021.
Not every expense is the same when it comes to the cost of general goods and services.
In other words, had both monetary and fiscal policy stayed the same, inflation would not have happened to the extent we are dealing with right now. But fiscal policy (government handouts) was extremely liberal after Covid, and that put us out of balance.
I am not sure I understand what you are trying to say. Inflation either spikes up because of increased of demand, or lack of supply. In our case, both have happened:
* Increased demand because free money is hitting the bank accounts of almost everyone.
* Decreased supply because of supply chain bottlenecks, when every vendor canceled their orders in anticipation of a lack of demand (which never happened, with Covid), and then all of a sudden had to place again the same orders. Since every vendor practiced Just-In-Time order of all parts, the sudden demand (or - to put it in other words - the "lack of demand" which never happened) put them in a though spot where everyone was re-ordering the same parts again, but factories had to start with a fresh order queue.
This is not a "wealthy people problem", this is a "everyone is creating demand" problem. Wealthy people cannot create inflation in common goods because they are both outnumbered by regular folks, and because there is not too many of them anyways. How many eggs can a wealthy family purchase anyways? The demand of wealthy people is otherwise focused on goods that are not affecting the rest of the pyramid (does anybody care if yachts are price inflated because too many wealthy people buy them?).
Easy access to money caused inflation along with a supply chain bottleneck, the easy money that caused inflation was not ~2-3% loans that were accessible for 13 years prior to Covid, it was PPP loans, stimulus checks, and student loan pause, which all combined was given to pretty much the entire population of the US. Next thing you know, inflation is up.
I am not saying that people didn't deserve handouts for a very unique and though time in the history of their lives (Covid), I am just making an observation with the benefit of hindsight.
By the way just with regular <2% YoY inflation, a $1m home in 2005 was worth $1.3m+ in 2019 (before covid and the current inflation spike), and that is with regular inflation.
Because homes cost a lot of money to begin with, the compounding effects of “healthy” inflation is going to be noticeable, and that doesn’t even factor in the low supply in the market.
I am not arguing that “before” it was better for the “little guys”, I am just making an observation.
You can affect the economy with fiscal policy (what our politicians/government does) and monetary policy (the central bank). Turns out monetary policy didn’t cause inflation to rise as much, as the previous 13 years demonstrate, but it was caused by liberal fiscal policy after Covid (all those points that I mentioned + supply chain bottlenecks).
The fact that our government blames the Fed is just scapegoating. They messed up big time, and acted quickly in such a way that they were not able to coordinate properly (rates should have gone up in light of liberal fiscal policies being implemented). These two entities don’t work and collaborate well together, and hindsight is 20/20.
We had close to 0% interest rates for almost a decade, and inflation was in check. It’s not the Fed that caused inflation, it is:
* Suspending school debt (extra income)
* Injecting real cash into the economy (stimulus checks and PPP loans to small businesses)
* Supply chain bottlenecks after Covid
All things that make real people wake up tomorrow and decide to spend some extra cash they have around in their bank account. It’s very tangible, it’s very measurable.
Of course 0% interest rates didn’t help, but it wasn’t the originating source of our inflation problems, as the previous 13 years of QE didn’t cause a spike in inflation.
It is possible to have a bank that just stores the money without touching it, but this bank would charge us for the costs of doing so, and it won’t be free, and it won’t be popular vs free options (which once every 10-20 years blow up).
It’s like trying to cheat your way into professional sports: if you are not a good fit, it won’t be pretty. And indeed we do have a track for athletes.
To think that all students are identical and they all deserve the same track is myopic. Turns out, we are all different people.
To force highly creative people into this routine, is dictatorship of the mind. That's how it was for me.
Edit: I upset the academics :)
I too want a penthouse in Manhattan, who do I need to mail to demand I am given a penthouse in Manhattan?
California clearly doesn’t have the capacity to serve the current population, let alone an increased population. All services are 3rd world quality, besides a few rich enclaves.
Plus don’t militaries have radar anyways for air defense? How is it possible that no radar from multiple countries picked up a silent Boeing 777 flying to nowhere?
Many wallets are being filled here, and there is no oversight on where the money is going and if it's working.
- I think we will experience a massive deflationary bust. The inflation narrative is over, it’s all about a potential recession now.
- By Summer 2023 we will experience YoY deflation and the Fed will cut then, or even sooner in anticipation to that.
- We may see hikes pausing as soon as February, and cuts starting in the summer as a result of rapid disinflation (which may turn into deflation). Deflation is a lot worse than inflation.
- We find out that the bulk of inflation was indeed caused by supply chain bottlenecks. As China fully re-opens, those will be resolved.
- Russia’s war with Ukraine will end (Putin is now agreeing to potentially think about negotiations). Oil prices will ease
More here: https://www.fourfourtwo.com/features/ac-milan-silvio-berlusc...
And yet, OP’s point of view is a very common one among people. So why is that? I think dismissing this as “nihilism” it’s not a clever continuation of this conversation.
Is it because the system is very inefficient at healing itself (or so seems to be) from bad actors, that the public thinks it will never be healed? Is it because politics is a zero sum game, therefore since many are corrupt and cheating, all the others seem compelled to do the same in order to hang onto power? (Very similar dynamics happens with pro cyclist).
Is it because it attracts a certain profile of people that are more likely to be corrupted?
Given the power nature of politics and the relatively few players involved, is it because we are holding everybody at a high standard therefore even one episode of corruption is enough to taint the whole category, even when corruption is limited in scope?
Lots of places to go before slapping the “nihilist” label on the car.
And if indeed the system doesn’t get better, what’s a good way to address the “nihilist” point of view across the population?
Is the problem too big and too complex to be solved because we can’t change human nature? Then maybe it is nihilism after all.