December 30, 20231 yr ^I think that the main argument against deflation is that it motivates people to put things off in the hope that a purchase or construction project will be cheaper at this time next year. If it really gets going, it causes a major recession.
December 30, 20231 yr I like the idea of a +0% inflation rate. Try to get as close to 0 as possible but err on the side of inflation instead of deflation. I agree with @Gramaryesome deflation wouldn't be the end of the world, but a small amount that encourages investing is probably better than encouraging putting it under your mattress. I don't agree with some of the more recent economic chatter that wants to change the inflation target from 0-2% to 2%. Personally I'd rather see .5% deflation than 2.5% inflation. I doubt that the majority of economists would agree with me, but my bias is towards frugality and fiscal responsibility. Too much inflation encourages people to spend their money right away, possibly good in the short term, but not sustainable. Too little encourages people to hoard their money in the hopes that it will buy more later. A small amount incentives investing in order to beat inflation. Given that, I can see the argument for a slightly higher rate than I'd like, but I don't want the situation where high-risk investments are necessary to get real returns after inflation. That seems like a recipe for disaster and not at all sustainable. Basically I think lower rates reward responsibility, and I think that's something a reasonable economic policy should do. To the extent we can reward responsible monetary behavior without damaging the economy we should do that.
December 30, 20231 yr 1 hour ago, Ethan said: I like the idea of a +0% inflation rate. Try to get as close to 0 as possible but err on the side of inflation instead of deflation. I agree with @Gramaryesome deflation wouldn't be the end of the world, but a small amount that encourages investing is probably better than encouraging putting it under your mattress. I don't agree with some of the more recent economic chatter that wants to change the inflation target from 0-2% to 2%. Personally I'd rather see .5% deflation than 2.5% inflation. I doubt that the majority of economists would agree with me, but my bias is towards frugality and fiscal responsibility. Too much inflation encourages people to spend their money right away, possibly good in the short term, but not sustainable. Too little encourages people to hoard their money in the hopes that it will buy more later. A small amount incentives investing in order to beat inflation. Given that, I can see the argument for a slightly higher rate than I'd like, but I don't want the situation where high-risk investments are necessary to get real returns after inflation. That seems like a recipe for disaster and not at all sustainable. Basically I think lower rates reward responsibility, and I think that's something a reasonable economic policy should do. To the extent we can reward responsible monetary behavior without damaging the economy we should do that. What "recent economic chatter"? It's always been my understanding that the Fed has been targeting 2% inflation because they figure that is the amount of inflation that greases the wheels of economic growth the most. Whether they're right or not, I'm not qualified to say.
December 30, 20231 yr Zero inflation means zero growth. There was little growth in the economy under the borderline ZIRP and extra low inflation of 2002 to 2020. What did grow massively in that time was the stock market.
December 31, 20231 yr I've frequently heard the claim that inflation is linked to GDP growth. I'd invite people to look at the graphs themselves. There might be a weak relationship. (I think I saw R2 = 0.4 in one study) but the idea that high inflation causes real GDP growth is a stretch, and ditto for low inflation causing low growth. Weak correlation at best. Inflation has also been said to be linked to unemployment, the so called Phillips curve. See below for how well that has worked out in practice. I bring this example up to show that economic correlations can often look very strong in a particular time and place, such as the USA in the 1960's, but very often that trend will disappear when viewed more broadly. See also, the laffer curve. The correlation between inflation and GDP looks very strong around 2008 in the USA, and somewhat strong for Japan the last couple decades, but zoomed out the correlation looks weak to non-existent. There's also the secondary problem that adjusted for inflation, wages haven't really been going up consistently for a while. True, some things, such as electronics, are cheaper, but others, such as education, real estate, and education, are not. Very recently the trend has turned positive again, and if that lasts maybe people will start to feel more positively about the economy. https://www.pewresearch.org/short-reads/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://effectivedemand.typepad.com/ed/2013/12/what-do-we-want-inflation-or-real-gdp-growth.html https://www.economicshelp.org/blog/1364/economics/phillips-curve-explained/ On 12/30/2023 at 1:36 PM, X said: What "recent economic chatter"? It's always been my understanding that the Fed has been targeting 2% inflation because they figure that is the amount of inflation that greases the wheels of economic growth the most. Whether they're right or not, I'm not qualified to say. My understanding has been that the Fed has historically viewed 2% as a kind of not to exceed number. A target of 2- to use my earlier phrasing. The "chatter" I was referencing was talking about treating 2% more as a rolling average target. I can't remember if I saw this here, on Reddit, or in a Crains article. My apologies.
December 31, 20231 yr Honestly, as long as there's no UBI or nationalized healthcare, the economy will remain dogs**t regardless of GDP growth or 3% inflation and unemployment. These statistics and graphs just don't make a difference to most people. Rising COL, falling purchasing power, and generally terrible wages are so inbedded in our economy that these stats don't mean all that much.
January 4, 20241 yr Cool map. But check out Elkhart and Kokomo, Indiana! Manufacturing makes a comeback there. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
January 4, 20241 yr 10 hours ago, KJP said: Cool map. But check out Elkhart and Kokomo, Indiana! Manufacturing makes a comeback there. Elkhart is the RV capital of the world, and RVs had a major boom during COVID. That bubble popped for 2023 so I'd expect an updated map would be a little less impressive. That said, the company I work for (not in the RV industry) is based in Elkhart. I first went up there in 2017, and a few times since including this summer. The city just looks so much nicer now than in did six years ago, you can really feel the effects of the recovery. Edited January 4, 20241 yr by mrCharlie
January 4, 20241 yr By the way if anybody wants to be a Wikipedia hero (I would, but don't have time this week), the wiki page on GDP by metro is totally screwed up. The numbers are mostly pulled from FRED, and they've got Real GDP and Total GDP mixed in, with some appearing to come from sources other than FRED. It's a mess that ought to be cleaned up. https://en.wikipedia.org/wiki/List_of_U.S._metropolitan_areas_by_GDP
January 9, 20241 yr Today's WSJ says office vacancies nationwide are a Cleveland-like 20%, with most of the vacancies being in the South, led by Houston, Dallas, and Austin. The report blames flexible working arrangements, easy money, available land, and lack of red tape for the overbuilding. I'm still amazed that Bedrock broke ground for Detroit's Hudson Block without a lead tenant; apparently they still lack one. Maybe that's why progress on the tower is so slow. https://www.wsj.com/real-estate/commercial/offices-around-america-hit-a-new-vacancy-record-166d98a5?mod=hp_major_pos1#cxrecs_s Remember: It's the Year of the Snake
February 2, 20241 yr It's the economy, stupid JUST IN: The US economy added a blockbuster 353,000 jobs in January, far exceeding expectations of 180,000. This is a really healthy economy. (December jobs revised up to 333,000) Unemployment rate: 3.7% Wage growth: 4.5% in past year —>far ahead of 3.4% inflation "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
February 2, 20241 yr 1 minute ago, KJP said: It's the economy, stupid JUST IN: The US economy added a blockbuster 353,000 jobs in January, far exceeding expectations of 180,000. This is a really healthy economy. (December jobs revised up to 333,000) Unemployment rate: 3.7% Wage growth: 4.5% in past year —>far ahead of 3.4% inflation Sign. I am "looking forward" to seeing my IRA drop about 1.5% today. It kills me how great economic news like this destroys my retirement savings.
February 2, 20241 yr 7 minutes ago, Htsguy said: Sign. I am "looking forward" to seeing my IRA drop about 1.5% today. It kills me how great economic news like this destroys my retirement savings. Put your IRA in T-bill funds instead then. 😇 😉 I will say, as great as the numbers are something is weird about them to me. The establishment survey and household survey have diverged from each other in an unusual way. Also, just to be pedantic, the economy actually lost jobs in January, as it always does every January. The 350,000 figure is seasonally adjusted and represents a much smaller loss than expected.
April 7, 20241 yr Economists increasingly believe that the post-pandemic surge in immigration is a key reason the economy has been able to grow steadily without pushing inflation higher. https://www.nbcnews.com/business/economy/immigrants-are-helping-us-job-market-grow-without-affecting-inflation-rcna146570 "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
April 12, 20241 yr Middle class Americans live in the richest country on earth at a time of unprecedented global prosperity and have let online ragebait convince themselves that they are living through awful historical circumstances. https://www.slowboring.com/p/were-living-in-the-best-of-times Does anyone else think the reason there is a disconnect between people's personal satisfaction (85%) and their satisfaction with the direction of the country (17%) might be due to the endless river of outrage and fear being pumped to 100 million phones every day on social media? "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
April 12, 20241 yr 2 hours ago, KJP said: Middle class Americans live in the richest country on earth at a time of unprecedented global prosperity and have let online ragebait convince themselves that they are living through awful historical circumstances. https://www.slowboring.com/p/were-living-in-the-best-of-times Does anyone else think the reason there is a disconnect between people's personal satisfaction (85%) and their satisfaction with the direction of the country (17%) might be due to the endless river of outrage and fear being pumped to 100 million phones every day on social media? I’m 100% convinced that the outrage is caused by 24/7 news coverage. It’s the same reason why so many idiots think the US crime rate is sky high and is higher than ever before. The news coverage just went up and now even the mundane crimes get reported. Back in the day people didn’t know what happened in other areas of their small town even. Now you can see reports of car theft from places 1000s of miles away.
April 12, 20241 yr 3 minutes ago, VintageLife said: I’m 100% convinced that the outrage is caused by 24/7 news coverage. It’s the same reason why so many idiots think the US crime rate is sky high and is higher than ever before. The news coverage just went up and now even the mundane crimes get reported. Back in the day people didn’t know what happened in other areas of their small town even. Now you can see reports of car theft from places 1000s of miles away. Yes, this. And the increasing political polarization of society which use and distort the 24/7 news.
April 12, 20241 yr 3 hours ago, KJP said: Middle class Americans live in the richest country on earth at a time of unprecedented global prosperity and have let online ragebait convince themselves that they are living through awful historical circumstances. https://www.slowboring.com/p/were-living-in-the-best-of-times Does anyone else think the reason there is a disconnect between people's personal satisfaction (85%) and their satisfaction with the direction of the country (17%) might be due to the endless river of outrage and fear being pumped to 100 million phones every day on social media? I believe it's caused by two things. I think about two thirds of it is what you pointed out above. The other third is a genuine economic phenomenon based on the last couple decades of slow growth. If you look at U.S. GDP growth by decade for the last 80 or so years, you'll find that there was growth every decade, but that the overall trend has been toward slower growth. I believe that people feel financially successful not based on what they have in absolute terms but based on comparing what they have now to what they had five years ago. For the median American, the how-well-off-am-I-now-versus-five-years-ago differential has declined, even though in absolute terms, the median American is better off. So people feel like they're worse off than their parents were not because they actually are but because their parents were X% better off in 1985 than in 1980, and they're much less than X% better off in 2024 versus 2019.
April 12, 20241 yr 15 minutes ago, LlamaLawyer said: I believe it's caused by two things. I think about two thirds of it is what you pointed out above. The other third is a genuine economic phenomenon based on the last couple decades of slow growth. If you look at U.S. GDP growth by decade for the last 80 or so years, you'll find that there was growth every decade, but that the overall trend has been toward slower growth. I believe that people feel financially successful not based on what they have in absolute terms but based on comparing what they have now to what they had five years ago. For the median American, the how-well-off-am-I-now-versus-five-years-ago differential has declined, even though in absolute terms, the median American is better off. So people feel like they're worse off than their parents were not because they actually are but because their parents were X% better off in 1985 than in 1980, and they're much less than X% better off in 2024 versus 2019. I’m curious if the rise in social media and the rise of influencers has played into this somewhat. People see all these kids and adults traveling all over or buying really nice houses and then think they are doing poorly or aren’t well off because they can’t travel every other weekend. It infects peoples minds and they can’t see that not all of those people are well off, and most likely are in crazy debt, or just come from extreme wealth and can travel without worry.
April 12, 20241 yr 15 minutes ago, LlamaLawyer said: I believe it's caused by two things. I think about two thirds of it is what you pointed out above. The other third is a genuine economic phenomenon based on the last couple decades of slow growth. If you look at U.S. GDP growth by decade for the last 80 or so years, you'll find that there was growth every decade, but that the overall trend has been toward slower growth. I believe that people feel financially successful not based on what they have in absolute terms but based on comparing what they have now to what they had five years ago. For the median American, the how-well-off-am-I-now-versus-five-years-ago differential has declined, even though in absolute terms, the median American is better off. So people feel like they're worse off than their parents were not because they actually are but because their parents were X% better off in 1985 than in 1980, and they're much less than X% better off in 2024 versus 2019. I would argue your weighting is inverted. If you look at when the decline began it's pretty well before smart phones and social media had the influence they have today. You could maybe expand social media to the fragmentation of media more generally allowing for siloed information and echo chambers, but I think looking at the chart there are some pretty clear events around the sharper declines that probably better explain what is going on. The first decline from the 70% mark is roughly around 9/11. Should be fairly obvious why Americans would not be satisfied with the direction of the country after this event; there was an increase in paranoia as Americans felt less safe and we entered into two wars that pretty quickly became unpopular. A second sharp decline looks to be around 2008 which would be the mortgage crisis and resulting recession. To your broader point this resulted in slower growth, flat real wages, and increasing economic inequality. It also left Millennials as the first generation that will not be better off economically than their parents as they entered a challenging employment market with ballooning student loan debts only to be hit with rising housing costs once they are able to enter into the housing market. Lastly, as someone else suggested, this graph would probably be more informative if broken out by partisan affiliation. On average outlook might be lower, but that might just be the result of Republicans and Democrats flipping their assessment based on which party is in power at the time.
April 12, 20241 yr 45 minutes ago, TBideon said: Let's be honest, everything has been broken since 9/11. No, people have been living in the greatest time, ever, to be alive. I remember an opinion piece in the late 90's titled "We're living in a golden age - why doesn't it feel golden?". Life is somehow even easier now than it was in the 90s, but unhappy people still manage to be unhappy. And what really, really pisses off unhappy people? Happy people. I remember taking a photography class in college where the girls went on a mini-rant about fashion magazines making them feel depressed. I told them to just stop looking at them. There was silence. Now we have Instagram, which has successfully addicted those exact same women. They could just delete it from their phone, but they won't.
April 12, 20241 yr 3 hours ago, VintageLife said: I’m 100% convinced that the outrage is caused by 24/7 news coverage. It’s the same reason why so many idiots think the US crime rate is sky high and is higher than ever before. The news coverage just went up and now even the mundane crimes get reported. Back in the day people didn’t know what happened in other areas of their small town even. Now you can see reports of car theft from places 1000s of miles away. It's not just the actual news; the media are reporting what MIGHT happen and, almost always, the worst possible version of it. Remember: It's the Year of the Snake
April 15, 20241 yr Indeed. What about recently? "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
April 19, 20241 yr On 4/12/2024 at 2:56 PM, Ethan said: Long term discontent explained in graphs. I feel like it's probably not related, but I find it fascinating that this disconnect began occurring *right* when the U.S. dropped the gold standard and Bretton Woods collapsed.
April 19, 20241 yr 9 minutes ago, LlamaLawyer said: I feel like it's probably not related, but I find it fascinating that this disconnect began occurring *right* when the U.S. dropped the gold standard and Bretton Woods collapsed. Perhaps related, but maybe not causally. As I'm sure you know, the gold standard was dropped to give the government more flexibility in managing economic policy as cracks in the US economy were beginning to appear after a decade of war in Vietnam and energy costs were rising. I think the period of stagflation is more likely the proximate cause. Pair that with another prominent inflection point in the last two graphs; the separation of the top 1%'s real annual wages and the productivity/wage gap in the 80's, marked by Regan's economic policies--importantly his SEC relaxing rules on corporate stock buybacks (Vox - How American CEOs got so rich).
April 19, 20241 yr 4 hours ago, LlamaLawyer said: I feel like it's probably not related, but I find it fascinating that this disconnect began occurring *right* when the U.S. dropped the gold standard and Bretton Woods collapsed. Raised a Keynesian, I love the Bretton Woods theory; but there was a parallel trend in the same time period: the tremendous expansion of derivatives trading - from a relatively small amount of straight-forward commodities hedging in the early 70s to $700 trillion mostly in synthetics by 2011. That is where a lot of the 1%ers made their money. Remember: It's the Year of the Snake
April 19, 20241 yr 2 hours ago, Dougal said: Raised a Keynesian, I love the Bretton Woods theory; but there was a parallel trend in the same time period: the tremendous expansion of derivatives trading - from a relatively small amount of straight-forward commodities hedging in the early 70s Farmers hedging earlier in the year against prices of their own grain in the Fall.
April 19, 20241 yr 1 minute ago, GCrites said: Farmers hedging earlier in the year against prices of their own grain in the Fall. And a couple of guys in Pennsylvania dealing in cocoa futures. Remember: It's the Year of the Snake
April 24, 20241 yr On 4/19/2024 at 2:01 PM, Dougal said: And a couple of guys in Pennsylvania dealing in cocoa futures. Um, that's frozen concentrated orange juice. If you're going to use 80s pop culture to be funny, at least get it right, Mister Beeks. "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
April 24, 20241 yr My dad bought that stuff. I couldn't see why he didn't just buy regular orange juice
April 27, 20241 yr On 4/24/2024 at 11:49 PM, GCrites said: My dad bought that stuff. I couldn't see why he didn't just buy regular orange juice It's all about that weird slurping sound when you get the frozen log of oj to slide out of the can just right. The real stuff just doesn't give you that sort of audio satisfaction.
April 27, 20241 yr On 4/19/2024 at 9:24 AM, LlamaLawyer said: I feel like it's probably not related, but I find it fascinating that this disconnect began occurring *right* when the U.S. dropped the gold standard and Bretton Woods collapsed. The gold standard sucked. Any call to war caused an inflationary spike.
May 4, 20241 yr No wonder why Republicans hate government. Because it can be used to hurt the economy and blame it on their political opponents. Oh wait... "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
May 5, 20241 yr On 5/4/2024 at 11:25 AM, KJP said: No wonder why Republicans hate government. Because it can be used to hurt the economy and blame it on their political opponents. Oh wait... In all honesty, that's not why Republicans oppose price control laws. We oppose them because they usually create shortages.
May 5, 20241 yr 1 hour ago, E Rocc said: In all honesty, that's not why Republicans oppose price control laws. We oppose them because they usually create shortages. Though I’d love to see subsides cut when profit margins reach certain thresholds. Why should taxpayers fund our own gouging.
May 22, 20241 yr Personally, my family's finances have never been better. New Harris-Guardian poll: - 56% say US is in recession (reality: 7 straight quarters of positive GDP growth) - 49% say stocks are down YTD (reality: S&P500 up 12%) - 49% say unemployment at a 50-year high (reality: U3 has been under 4% longer than any period since the 1960s) "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
May 22, 20241 yr ^^ I think you point out the results of the today's news media putting out mostly bad or bad-sounding news and then hyping it to be as bad as possible. The good news, of which there is lots, gets no notice even when it is reported. Remember: It's the Year of the Snake
May 28, 20241 yr GOLDMAN'S PASQUARIELLO: ".. the US is growing above trend .. wages are growing faster than the rest of the inflation basket, so real disposable income is rising .. alongside this is a MASSIVE wealth effect from the stock market and the housing market .. and, all of this comes on top of healthy household balance sheets. .. US consumption is more durable than the bears believe." Greatest wage gains are among lower wage earners... "In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage." -- John Steinbeck
May 28, 20241 yr This isn't the media dunking on Biden or any conspiratorial reason. People get news from 100 different sources today, this isn't them "being told" to feel bad. The same applies to anyone pushing the "economy is strong and the strongest in the world right now" narrative, people don't hear it and it doesn't jive with the below. It's human nature to see prices as high as they are and wretch. If eggs cost $8 a carton now, if McDonald's is $20 for a meal now, it's annoying. That's at the fore of everyone's feelings on the economy; it's in your face everyday. As time goes on, and (hopefully) peoples' wealth builds, the negativity will fade. That won't fade by election time. So if I was the Biden admin, I'd focus my attention on every non-economic issue I can spend time on. No amount of magic recovery and telling people it's a magic recovery will change the fact that Trump wins in a world where this election is about the economy. Edited May 28, 20241 yr by 10albersa
May 28, 20241 yr In order to not have inflation we would have to be a Third-World country -- which of course is what Republicans want. Or have been a country where everything was already really expensive (including wages) such as Austria.
May 30, 20241 yr On 5/28/2024 at 5:24 PM, 10albersa said: This isn't the media dunking on Biden or any conspiratorial reason. People get news from 100 different sources today, this isn't them "being told" to feel bad. The same applies to anyone pushing the "economy is strong and the strongest in the world right now" narrative, people don't hear it and it doesn't jive with the below. It's human nature to see prices as high as they are and wretch. If eggs cost $8 a carton now, if McDonald's is $20 for a meal now, it's annoying. That's at the fore of everyone's feelings on the economy; it's in your face everyday. As time goes on, and (hopefully) peoples' wealth builds, the negativity will fade. That won't fade by election time. So if I was the Biden admin, I'd focus my attention on every non-economic issue I can spend time on. No amount of magic recovery and telling people it's a magic recovery will change the fact that Trump wins in a world where this election is about the economy. Both of the items you sight as examples are about half as much as the prices you're quoting, so thank you for illustrating that a huge part of the problem is some combination of ignorance or shear dishonesty. Some people don't really know what the actual prices of things are (I don't ever buy eggs, and so frankly I had to look up the prices), and some people will just lie willy-nilly about such things to get some cheap points in an argument.
May 30, 20241 yr 7 hours ago, X said: Both of the items you sight as examples are about half as much as the prices you're quoting, so thank you for illustrating that a huge part of the problem is some combination of ignorance or shear dishonesty. Some people don't really know what the actual prices of things are (I don't ever buy eggs, and so frankly I had to look up the prices), and some people will just lie willy-nilly about such things to get some cheap points in an argument. Ummm. Okay… At one point the eggs we usually bought were that expensive, and you absolutely can rack up a $20 bill at McDonalds, and it’s much higher than that a family of 4. My point was that prices you face every day are up. Regardless of what cherry picked items I chose, prices are up 22% in food, and housing since 2020. Gas and car parts are up 33%! And here, I’ll mark a source for you.
May 30, 20241 yr This is the biggest issue right now: https://wallethub.com/edu/cc/average-credit-card-debt/25533 Debt is up 15% year to year with an average rate of 27.65% per Forbes
May 30, 20241 yr 51 minutes ago, 10albersa said: Ummm. Okay… At one point the eggs we usually bought were that expensive, and you absolutely can rack up a $20 bill at McDonalds, and it’s much higher than that a family of 4. My point was that prices you face every day are up. Regardless of what cherry picked items I chose, prices are up 22% in food, and housing since 2020. Gas and car parts are up 33%! And here, I’ll mark a source for you. You can rack up $100 bill at McDonald's if you buy a bunch of meals for a bunch of people. But one meal is going to cost you up to maybe $12, not $20. Eggs spiked in price for like a minute several months ago, and only because of a disease that caused chicken farmers to have to kill millions of chickens. What's Biden supposed to have done about that? I'm not saying inflation isn't a problem. I'm saying there's a lot of BS going around about what the prices of things are, a lot of people falling for it, and that this is as big a part of Biden's problem as the actual numbers. That was my point.
May 30, 20241 yr Meanwhile, McDonalds announced a 1.93 BILLION dollar profit for their first quarter of 2024. While their customers may be hurting, McDonalds and it's shareholders certainly are not... https://www.marketwatch.com/story/mcdonalds-stock-drops-as-profit-comes-up-short-85d55390
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