>What keeps us living paycheck to paycheck is that we spend more than we make on stuff we don’t need.
This is still true, though. When I turned 40 in 1994, I decided I had lived with debt long enough. So I sold my plane. my boat and my 2nd house. In the next four years, I paid off the remaining mortgage on my 1st house and installments on my cars and credit cards. Was it hard? Yes, it was damn hard. It's like kicking a habit like a drug addiction, but the drug is easy credit.
So something I don't quite get is this. (some) economist postulate that pumping metric fucking shit-tons of money into the economy will cause inflation, because there is literally more money chasing the same amount of goods, and this creates a quite expected upwards pressure in prices.
Other economists and politicians posit this won't happen and then proceed to do it, and then inflation happens, and then all of a sudden nobody could have predicted it, it is transitory (until it clearly is not), it is caused by Putin (except not according to the fed chair), it is because the economy is in transition, etc etc.
How about, don't pump metric shit-tons of money into the economy and see how that works.
And while you are at it, maybe don't make a campaign promise to end fossil fuels and act all surprised when the prices for fossil fuels go through the roof. I'm as happy as the next person to see the end to carbon emissions, but I don't do everything I can to end it and then whine about it ending .
Ok, but how can you as a fed say that if you double the money supply the velocity will stay the same forever?
This is the ridiculous issue with this MMT theory. How the hell can you be so stupid to assume that just because money velocity is slow now, and you pump lots of money into the system (actually you give it to financial companies, another red flag), it won’t cause inflation in a few years when things pick up?
Correct me if I’m wrong but inflation has done nothing but go up (at least in the US). If they’re keeping it in a range then that range has no upper bound.
If that’s the case, why do they adjust lending (mostly rates) in order to try to hit a moderate inflation target? Surely, they must believe there’s a linkage.
The governments of the world decided to prop up businesses, employment and asset wealth by printing loads of money. The alternatives were to seize wealth and redistribute it or let it all burn. I can see why they did what they did, although I think history will not be kind.
2. Why did prices for pretty much everything go up the week, or two, after the media started talking about the war, supply chain problems, and government spending?
Prices were pretty steady during Covid, at least on food, and gas, and most consumer products, except building materials, and appliances.
I personally think corporations used the war, and Covid, to raise prices seemingly overnight. My Chevron station went from $4.29 to $6.25 in a day.
These companies made record profits during Covid, but poof in a couple of weeks just blew up their pricing?
I think they used found a few good excuses to raise prices; and they all fell in line.
Kinda like my $5.49 rebate on my $800/yr. insurance policy at the beginning of Covid. Mercury by the way, and they used to be fair.
Yea, I was uncomfortable with Powell throwing money at the stock market, and buying all those mortgage backed securities, when housing and the stock market thrived during Covid. His response was, 'I kept my agreement with the financial sector.'
So it looks like an overreaction, but the prices are going to be correlated with future expectations, not with prices obtainable right now. Price jumped now because the whole supply chain for X predicted the price on the market will raise soon. Since the revenue pays for future production, this makes sense - what you pay now pays for what you buy again in a month.
Yes, in 2009 there was lots of talk of “we’re just kicking the can down the road” when it came to TARP and other measures. But even then, kicking the can became regular policy. I think we’re at the end of the road and reality is going to fix the issue for us whether we like it or not.
Yeah, look at interest rates long term. Money got looser and looser with every downturn. After the last one, the rates went more or less to zero. Everyone had to know that next time we'd be hitting the wall.
Inflation is happening now because oil demand is higher than supply, food demand is higher than supply, electronic chip demand is higher than supply. The causes of the supply drought is due to covid reducing supply and it not recovering fast enough, and of course the whole Russia invasion of Ukraine.
To what extent do we have saturation of some parts of the system? We expect growth in all areas including how much stuff the can be delivered from manufacturing, but investments in capacity might be missing
> Inflation is happening now because oil demand is higher than supply, food demand is higher than supply, electronic chip demand is higher than supply.
But none of that is sufficient for inflation to occur. Inflation is a fall in the value of a unit of currency. In your terms, it can only occur when currency supply is higher than currency demand.[1]
But in other terms, while it is true that shortfalls in the supply of food, oil, and circuitry lower the value of a dollar, it is not true that they are able to cause inflation; if the number of dollars is lowered commensurately with the loss in value, that will offset the effect.
No, a general rise in prices and a fall in currency value are one and the same thing. The meaning of "a fall in currency value" is nothing other than "a general rise in prices".
No, it wouldnt. Because the UK can experience (temporary) inflation whilst Thailand not. These are the kinds of confusion which arises when you offer a theory of why inflation occurs (currency changes), rather than a definition.
The pound sterling can experience inflation while the Thai baht doesn't, that's true.
And it's also true that the pound sterling can experience inflation while maintaining its exchange rate against the Thai baht.
But those two things cannot happen simultaneously; if the pound is experiencing inflation and maintaining its exchange rate with the baht, then the baht is also experiencing inflation.
currencies dont experience inflation... it's prices which inflate
a currency is "devalued" by, eg., money printing, only in the sense that eventually the new cash drives prices up
when speaking about "inflation" we're always talking about some sets of prices... even in the case of "general inflation", this does not mean global prices for all products -- it means a certain subset, eg., CPI
so the GBP can maintain its value in many senses whilst the person-on-the-street experiences CPI.. the value of GBP isnt only in "general purchasing power relative to market relative to baskets"
trivially, arbitrage opportunities do exist, markets aren't perfectly efficient.. so there can be cases where UK CPI inflation is "ahead of the global curve"
> Inflation is happening now because oil demand is higher than supply, food demand is higher than supply, electronic chip demand is higher than supply.
I'm not sure this statement makes that much sense, won't demand always go up when prices drop, and drop off when it goes up? Demand does not exist in abstract, if I could get an iPhone 13 pro for $10 I would take 5, if it costs $2,000 I will take 0. If oil cost $1 a gallon instead of $4, won't the demand increase? And if it is $10 a gallon won't the demand decrease?
Maybe to simplify, cite something that backs your claim that demand is higher than supply.
And then maybe further, can you clarify: will demand not increase when people are given more money? Won't for example trillions of direct and indirect stimulus drive up demand? And if price stays constant won't the increase in demand not have to result in prices going up in order to avoid supply shortages?
How sensitive demand is to changes in price depends on a lot of factors. When heating your home suddenly costs four times as much you can't just use a quarter of the gas, or you'll freeze. Given enough time of course, demand will go down as people improve insulation and switch to heat pumps, but on the scale of a year or two or three demand can't be reduced very much.
> When heating your home suddenly costs four times as much you can't just use a quarter of the gas, or you'll freeze.
Maybe this is an aside to you, but would you expect heating cost to increase or decrease if you are using fossil fuels for heating, and the government has promised to end fossil fuels?
I guess we can point all fingers to Putin, but decreasing the supply of fossil fuels seems to be an implicit campaign promise of the Biden administration, and he has the most popular administration in history, so I'm not sure why people are upset with paying more for heating and gas.
Why does the media's political bias always seem to be the antithesis of the party in power? To scapegoat the failures of each administration to actually use their power for the public good. I mean, the same media that was apparently run by a vast left-wing conspiracy for years is suddenly right-wing? Did they just change hats?
What accomplishment does Biden have that's going to counterbalance how pathetic his administration's response to the repeal of Roe v. Wade appears? It's become a meme among the left that the only thing the Democrats had prepared in response were fundraising letters.
I think you're being trolled. I admit that I can't be fully sure of it, but I seriously doubt GP believes that Biden has the most popular administration in history; I don't believe Biden has the most popular administration among just the last three, a sentiment that I suspect GP shares.
> I don't believe Biden has the most popular administration among just the last three, a sentiment that I suspect GP shares.
Well he is not if you take the poll numbers, but as Biden has said, the low poll numbers are mainly a side effect of the negative sentiment for his administration in the right wing media. You will need to compensate for this to get an accurate picture.
If you're trying to measure popularity ("the state or condition of being liked, admired, or supported by many people") of someone in an important job, it seems like asking many people whether they approve of the job being done is a primary measurement.
"Compensating" for perceived reasons why a President is not liked, admired, or supported seems antithetical to the goal of measuring popularity. That would seem to me more like "fudging the data" (if I'm being polite) or "making shit up" (if I'm going for clarity).
> I mean, the same media that was apparently run by a vast left-wing conspiracy for years is suddenly right-wing? Did they just change hats?
No, this was just a lie though, the media has always been right wing, they lie and say they are not, but they are.
> What accomplishment does Biden have
He ended COVID, he pulled out of Afghanistan, he restored US reputation on the global stage, he put Russia in it's place, he was busy ending fossil fuels. I dunno there are many things, you just don't hear of them because the media is trying to tank his presidency.
I'll grant that he was more competent at administrating the response than Trump, but COVID hasn't ended, the pandemic is still in progress.
>he pulled out of Afghanistan
Yes, but it was a humanitarian disaster. You can argue that he shouldn't be blamed for that, and I might agree, but it didn't make him look good even when reported on honestly.
>he restored US reputation on the global stage
Citation needed. NATO got a credibility boost from Russia's invasion, but the US wound up looking weak and indecisive. And I don't think you can restore the stain on America's reputation that was Trump so easily, or unburn that many bridges. Maybe, if Trumpists don't take power again in 2024, but at the moment being the country in which guns have more rights than women (and soon to be LGBTQ and black people) is not good optics.
>he put Russia in it's place
In what sense? Is Russia's "place" right on top of Ukraine? Did I miss the news about the American negotiated surrender and Russian retreat? I don't understand.
I don't think many people expected the price to rise quite as quickly as it did. Demand for heat pumps and rooftop solar currently outstrips supply by far, at least here in Germany.
That can be caused by supply-side inflation, eg., a sudden general drop in supply. Or demand-side, a sudden general increase in available cash.
Central banks increasing money supply is demand-side inflation. The issue with this, as a "final theory", is the last decade+ where it didnt hold; and in japan where inflation and money supply are entirely uncorrelated.
The only difference today, with inflation, is the supply-side shock. If central bank policies were causing inflation, they'dve caused it over the last decade; and likewise in japan.
Whilst central bank policies have raised asset prices, etc. there's very limited evidence they've raised, eg., the CPI
> The only difference today, with inflation, is the supply-side shock. If central bank policies were causing inflation, they'dve caused it over the last decade; and likewise in japan.
They money supply (M1SL) increase by 500% since March 2020 - don't tell me that this is purely a supply side shock.
Or at the very least cite something that shows supply has dropped. And then explain to my why policies that increase the money supply by 500% is not expected to cause historic inflation while a pandemic is affecting supply?
Well I said central bank, the gov. has also given a stimulus during the pandemic -- this is a larger part of the story.
However, we should be careful not just to say inflation is caused by the money supply. This is a theory of why inflation could occur, it isnt inflation. Inflation is just the general rise in prices.
Given that everything is suddenly more expensive when energy prices rise (since energy is required for everything), etc. And given supply chain crises, etc.
We are seeing a case where the supply-side is undergoing huge general shocks. If you want to say that M1 has caused a demand-side inflation, fine... but it seems to me that 1/2ing the price of oil would 1/2inflation; whereas doubling interest rates wont.
So if money supply is the cause of inflation, interest rates will entirely solve the problem. If the supply-side is, then it wont.
I'd place a large bet on supply side being the major part. I think 1/2ing oil price would take inflation down to (4-6)%, at which interest rates would then be effective.
> If you want to say that M1 has caused a demand-side inflation, fine... but it seems to me that 1/2ing the price of oil would 1/2inflation
I would like to see some evidence for this, as I don't think this is the case, I think this is just propaganda from fossil fuel companies and their political allies. Like Biden said the economy is just in transition. I think restricting oil and gas supply further will be much more more likely to lower inflation. Maybe Biden should outlaw all oil refining on US soil to help drive the transformation faster.
If people were just less greedy and cared more about the environment than their wallets then they would buy electric cars instead of driving gas guzzling SUVs that are destroying our planet.
If that was the cause, then you'd see it reflected in exchange rates. For example, Canada did about half as much QE per capita as the US did. You would expect that to cause the American dollar to fall against the Canadian dollar, but in fact it has risen. And Canada isn't a picked example, almost every western country did less QE than the US and yet has seen their currency fall against the dollar.
> I'm not sure this statement makes that much sense, won't demand always go up when prices drop, and drop off when it goes up? Demand does not exist in abstract, if I could get an iPhone 13 pro for $10 I would take 5, if it costs $2,000 I will take 0. If oil cost $1 a gallon instead of $4, won't the demand increase? And if it is $10 a gallon won't the demand decrease?
Does it work like that in real world? If gas price doubles does that mean that folks who commute by car go only half way to work or stay at home every other day? If an iPhone costs $10, why would you buy 5 of them? What would you do with extra four? Browse hn on five screens at once?
Supply and demand are not infinitely elastic, as some like to think.
> If gas price doubles does that mean that folks who commute by car go only half way to work or stay at home every other day?
There are a lot of behavior that can be changed, not all of it, but people could skip some trips, maybe only 10% - but it is not 0%.
> If an iPhone costs $10, why would you buy 5 of them?
I have 5 umbrellas but just one body. I sometimes forget it at some place, or misplace it. Nice to have a spare when I need one. I could then leave an iPhone at work for when my battery runs out for example.
> Supply and demand are not infinitely elastic, as some like to think.
Fair enough, my examples were a bit contrived and absurd, but my point is more just that neither supply nor demand is fixed. But yes they are not infinitely elastic, but they are somewhat elastic.
Remember the early days of the “bend the curve” part of the pandemic? The US economy was switched off with nothing but crossed fingers ensuring it would turn back on when the switch was flipped back. Production was quite literally brought to near zero. Anyone who dared to hesitate was labeled an anti-science caveman. I hope someone somewhere wrote down how bad an idea that was.
What does this mean? Not always, but most of the time neither supply nor demand is being fully used up, and both unmet supply and unmet demand are irrelevant.
What evidence do you have that campaign promises to end fossil fuels caused an increase in oil prices. Especially since there is the ukraine war, the end of covid, and inflation?
> What evidence do you have that campaign promises to end fossil fuels caused an increase in oil prices.
If you create policy that deter investment in fossil fuels, and reduce production, would you expect prices to go up or down? And if you don't create policy to deter investment and reduce production, then how will you end fossil fuels?
Maybe a better question to ask is, do you think there is any way to end fossil fuels other than having it be more expensive than alternatives?
Why would the government resume leasing for oil and gas drilling on federal lands if they don't think stopping it affected the supply [1]? Is it just because they really want to mess the climate up some more and break campaign promises?
All I see is promise made, promise kept ... or well not quite but at least they were trying their best up til recently when the Biden administration took a anti climate policy turn for some reason which I don't get. I will still vote for them, but I just wish they would not have broken this particular campaign promise. I think they are right when they said people should just stop being greedy and buy electric cars. If people did this the price of oil will be irrelevant.
But I guess the media has been incredibly negative towards the Biden administration and not giving him credit for the good things he has done, so I'm not surprised that people don't recognize or appreciate the work he has done to end fossil fuels.
U.S. formally rejoins Paris Climate Agreement | May 21, 2021
---
Put US on a course to net-zero emissions by 2050.
Joe Biden’s moves start the US toward net-zero carbon, but Congress is key | January 27, 2021
--
Establish new fuel economy standards
EPA tightens fuel efficiency rules for cars and light trucks | January 11, 2022
--
Give disadvantaged communities 40% of spending benefits related to clean energy
Congress holds key on clean energy dollars to poorer communities | July 20, 2021
###
There are four related to the environment that I can see. He's rejoined the paris aggreement and had then EPA increase fuel economy. The other two haven't been done ..yet.
What promise did he break? If he is anti climate what are you comparing him too? The past president left the Paris agreenment.
> What promise did he break? If he is anti climate what are you comparing him too? The past president left the Paris agreenment.
Well like I said I still think he is the best president ever, but In my view allowing new leases on federal land[1] and asking oil companies to boost supply[2] is breaking his campaign promise to end fossil fuels[3].
But I understand this may be entirely due to my own biases, and I don't want to malign him, like I said I think he is without question the best president ever and I do not mean to suggest I doubt this for one moment. I would of course prefer that he did not allow new leases on federal land but I can see that I should maybe listen to what others think and consider how this is maybe just a better way to keep his promise than what I have considered. And to be fair I'm not entirely sure that the promise to end fossil fuels is not a right wing smear against him, this could very well be the case.
> In my view allowing new leases on federal land[1] and asking oil companies to boost supply[2] is breaking his campaign promise to end fossil fuels[3].
But as you rightly point out there are so many that he has kept that one hardly makes a difference and he still is the most popular president ever so I don't mean to disparage him.
It's not just the amount of money, it is the amount of money available vs the amount of goods available. I'm not an enconomist, so I don't know exactly why, but somehow all the additionally money (which is in form of credits) doesn't end up in the hand of consumers. I think what is going on is that it is harder and harder to get return on investment, which makes it harder to get money through "organic" investments, so they make money cheaper and lower the interest rates, which makes it even harder to get ROI. So all the money they pump in just goes around and keeps the wheels turning artificially. (Meanwhile all the capital flees into housing, crypto and similar markets and inflates them like crazy.)
Anyway, I think the reason behind the inflation is not that the amount of cash is to high. Wages have not grown accordingly and demand has not gone up. But due to Covid, supply chain issues (related and incidental), international conflict, etc., we have just been producing less stuff.
So I would say the inflation of some goods (housing) is due to the simmering financial crisis, and the inflation of others (like wheat, cooking oil, electronics) is due to political strife and economic instability.
> It's not just the amount of money, it is the amount of money available vs the amount of goods available.
Okay, but ... if you just pumping money into the economy, are you not by definition just pumping money into the economy, as opposed to goods and money? If congress could by decree make goods why would anyone need to work?
If people (companies) just use that money to buy financial products, pay off other debt, and so on, and it just kinda circulates in the banks, but most of it doesn't end up in consumer's hands - then there is no reason that the prices for consumer goods should go up, right?
I'm not sure demand driven inflation (= money supply driven) is a relevant problem at the moment. On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages.
> If people (companies) just use that money to buy financial products, pay off other debt, and so on, and it just kinda circulates in the banks, but most of it doesn't end up in consumer's hands - then there is no reason that the prices for consumer goods should go up, right?
Even if there was no direct stimulus, which there was, companies don't just take stimulus, put it in their bank account and forget about it. But sure, if you have some evidence to suggest that this money never really entered circulation I think it would help your case.
The reality is though, money supply increases by 400% since March 2020 and historic inflation followed. There may be other reasons, but I'm not sure what you would expect to see other than inflation.
> On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages.
Wages have increased have they not? This is another signature achievement of the much maligned Biden administration, that the media is trying to hide. Wages are at historically high levels.
I’ll add that conspicuous consumption, risky investments, and high indebtedness could at least partly be explained by government currency devaluations and low interest rates. It is rational to consume sooner rather than later and take on debt if you’re living in a society that penalizes saving your money. I don’t know how sustainable modern advanced economies’ obsession with growth is.
There is a lot to unpack here. I can’t go into details, maybe read a book on MMT. (I can only recommend German resources…)
Some points:
Deflation is bad for the economy, you want moderate inflation.
Increasing the money supply is a prerequisite for inflation, but not the cause. The euro zone increased it‘s money supply enormously for mor than a decade and - until last year - had problems meeting it‘s 2% a year inflation goal.
Increasing the money supply allows for cheap investments for both the state and private business. If the investments provide a net benefit to the economy (e.g. infrastructure) you should just do them. “Anything we can actually do we can afford.” - Keynes
> maybe don't make a campaign promise to end fossil fuels and act all surprised when the prices for fossil fuels go through the roof
There's a well sourced explanation in this video regarding the price of fuel that I really enjoyed. https://youtu.be/QnBqAzJXVGo
There's also previous ones dealing with oil drilling.
The tldr idea is that the US could drill more to satisfy the supply right now, but oil corps like money and high oil prices give them that. And that's regardless of the demand going down over years - the drilling rights are already in place.
If you observed the absolute insanity that has been happening in asset prices, venture funding, equities, and crypto, there is absolutely no way you'd think that money printing doesn't lead to inflation (at best) and the complete Mickey-Mousification of the economy (at worst).
Money has started feeling like a joke. It's thrown around for anything and everything.
An ERC-20 memecoin called Shiba Inu hit a market cap of $41B. A dying video game retailer hit a market cap of nearly $30B. A taxi aggregator swallowed $33B in funding and never turned a dime in operational profit in 12 years of its existence. A house bought in 2019 doubled in price in under 2 years.
The way it’s supposed to work is that the government sells bonds and the money goes away. Much like your original premise, it doesn’t much make sense that people think modern monetary policy only thought up quantitative easing and not quantitative tightening.
Can’t speak to how it will end up working, but its definitely not a surprise.
If the median rent costs double (or tripple, or more) the median income any discourse about how indivduals spend their money is not only pointless, it is cynical.
Problems of that scale cannot be tackled by changing individual spending. You could move somewhere else (if you can actually afford to do so), but the problem is not limited to one region.
> If the median rent costs double (or tripple, or more) the median income any discourse about how indivduals spend their money is not only pointless, it is cynical.
It obviously does not. The cost to purchase an entire house and the land it sits on is at that multiple or slightly more. The cost to merely use the median rental for a year is under the median income.
It's still complete bullshit, rent has gone up not just mortgages.
They are also are ignoring inflation and all the companies using the Ukraine war and the lockdown to justify the price multiples.
While all are hitting record profits.
Rent, not mortgages, has gone up from 1k to 2.5k here. For a one bedroom apartment. Minimum wage here will get you ~2k/mo.
Minimum wage doesn't come close to hitting rents, especially when they have insane demands like you must make 4x the rent to even apply.
It's hilarious that landlords were crying they couldn't rent their places out because of coronavirus, then they increased their rents 2-4x, the places are still empty- as are the houses for sale, yet they seem fine with empty property now.
I'd always laugh at the articles saying there wasn't a grand exodus from California, as I see it every day. Still to this day, just not as many.
Where did they go? Texas for the most part. And what happened to Austin? Priced locals out. Now those Texans are moving, but not here, they can't afford the exorbitant prices of everything ($7/gal for gas!).
Many Texans are still making $7.25/hr. How tf can anyone afford to live with that?
Cell phones cost the same, power costs the same, rent is getting there, internet costs the same as here in California where at least minimum wage is ~$15/hr.
Poor people have been getting shit on since before the pandemic but now it's just evil what's happening.
> Rent, not mortgages, has gone up from 1k to 2.5k here. For a one bedroom apartment. Minimum wage here will get you ~2k/mo.
A few posts ago, it was "median rent costs double (or tripple, or more) the median income". Now, it's "rent is about the same as minimum income" (which is still a problem, but nowhere near the same thing as the prior claim).
Neo-feudalism is what is happening. Every ~10 year cycle they move us closer to that system in the West. It seems like the post-industrial-revolution era where workers gained some rights and wealth are eroding and we are going back to a more historical norm where most of our income/labor goes into survival basics.
Sadly this time there is no "New World" to flee to for economic prosperity. This whole middle class thing might have been an anomalous blip?
If you're not buying lattes to compete for the same pool of available houses (and other people are doing that), you are absolutely ruin your economy by starving it for cash, while having price growth destroy any of your latte savings.
Buy lattes and consider moving to where housing supply is not constrained.
Housing market is one big pyramid scheme, and "financial advisors" need new generation to join. Everyone MUST buy a house to start family. Well we found out that family and house are optional, and you can buy a latte instead!
If you're not buying lattes to compete for the same pool of available houses (and other people are doing that), you are absolutely ruin your economy by starving it for cash
I wish it were that easy to grind this economy to a halt, but it doesn't really work that way. Consumer shortfalls cause hiccups in the system, but the ruling class is still making steady progress on its mission to reduce the rest of us to generational peonage. You can boycott Black Friday, but so long as you have to show up for work to survive, the bad guys are going to keep winning.
Every systemic problem that the oligarchs of a capitalist system dont want to fix the sensible way eventually gets framed as a problem of personal responsibility.
* When the first cars started killing people -> make jaywalking a crime.
* When people take on too much credit card debt -> obviously a problem with financial literacy
* When large companies destroy the environment -> if people just recycled more we could save the planet...
* You're broke in 1990 -> why didnt you get a degree?
* you're broke in 2000 with a degree -> why didnt you get a STEM degree?
* you're broke in 2010 with a STEM degree -> why didnt you get a compsci degree?
* You're broke in 2020 with a compsci degree -> tsk you should have done something useful like machine learning.
This only actually twigged for me when I worked for a large company that was pretty horrible for the environment that kept pushing this canard about everybody doing their bit with recycling.
...i know, i know right... why didnt I just take personal responsibility and not take a job at a horrible company that pollutes? Thats how I could do my bit.
Being an environmentalist 5th column is probably the way to go, actually.
The plastic straw thing blew my mind. I’m convinced it was a viral marketing ploy by the paper industry. That’s pretty far into conspiracy territory but it makes more sense than the saving the turtles story.
According to the default propaganda model of our society the solution is hard work and taking personal responsibility.
According to the investment/FIRE communities and Thomas Piketty's study, yea, you're better off siphoning off taking the fruits of others' work via "the magic of compounding".
Amen. Personal responsibility is the economic analogue of "thoughts and prayers" whenever a shooting occurs. (Note: conservatives don't actually even pray for anyone, because they're the Elect, and since they're already going to heaven while the rest of us fall into eternal hellfire, why bother?) Except: here it is on us to pray--to them. They won't listen. They'll just laugh.
Also:
* You're broke in 2030 with a machine learning degree -> you should have been born a robot.
> * You're broke in 1990 -> why didnt you get a degree?
> * you're broke in 2000 with a degree -> why didnt you get a STEM degree?
> * you're broke in 2010 with a STEM degree -> why didnt you get a
compsci degree?
> * You're broke in 2020 with a compsci degree -> tsk you should have
done something useful like machine learning.
LOL. I like it. reads a bit like "First they came for the..."
As a "not broke yet" (by British standards) computer scientist, having
jumped all these hoops and many more, I'm just wondering what the next
ominous step is?
I fear this ends like:
You're broke in 2048 with a CS degree, PhD in DSP and a successful
research career in signals and systems - because you didn't throw all
human values to the wind and join a cabal of psychopathic technical
elites hell-bent of subverting the entirety of science and technology
to an infantile, omnipotent project of world-domination that
ultimately added no value, screwed the entire planet and human race.
(and for those also with PhDs in ML/DSP smugly working for the Empire,
and thinking "I'm safe", your turn comes when abject obedience is
insufficient to save you from the sinking ship)
The economy is what it is, and you can't really control house prices.
Still, being frugal is not a bad advice and will definitely help you save money.
What's the mental health cost though?
That latte or that luxury item can be what keep you sane in a world that become increasingly worse.
Lattes, pr0n, weed, alcohol. They definitely have their pro and cons, but they may be needed at certain times of your life.
If they start ruining your life, seek help.
Well, all this macro economics discussion is nice.
But on a micro level, you can't get around the fact that if you spend $50 on lattes a month, and then you stop doing that, you will have $50 more per month.
And if you spend $50 on buying a luxury brand shirt rather than a $10 shirt, you have $40 less.
If you DON'T spend $50 on lattes, then obviously you can't save that money.
Anything else is self flaggelating excuses about why you need to buy lattes, and why capitalism is bad, and an excuse for your status games or your consumer desires. Fact is, if you buy lattes, you can save that money instead.
It's an example ffs. If that's your criticism of what I wrote, it doesn't really make sense, everyone can personally decide how much they want to spend on avoidable luxuries.
But btw, $50 a month means $50 extra you can spend on mortgage payments, which can actually add a couple of thousand dollars to your budget potentially.
Everyone can personally decide how much they want to spend on avoidable luxuries, of course. It just so happens that the "avoidable luxuries" that the overwhelming majority of the population can afford—the clichéd old lattes and avocado toast—are mere rounding errors when compared to the cost of housing that is keeping them from being able to own a home.
Having been in that situation, with a good salary (3 times the average of the UK) and spending close to 0 in leisure, I can tell you that it’s still impossible to buy a decent house in London even if you give up on all avoidable luxuries, because you need a 160-200K£ deposit, that would require 20-30 years of savings. The average salary in London is 35K£, the average house cost 500K£ and if it doesn’t fall apart and if it’s not in the middle of nowhere, a 2-bed flat cost 600K£.
I find extremely dishonest and patronising to suggest that people can’t buy houses because they spend too much on avocados or Netflix. Even if one spent 5000£ a year on these, which is an order of magnitude too high for the average earner, it’s still going to take them 40 years of monastic life to save 200K£.
I’m out of that infernal loop only because a few years ago my salary jumped above 250K£ and I’ve made 200-300K£, after tax, in a single year when my employer did its IPO. Let’s not pretend that the average person can buy a half decent family home in a decent part of the UK just by working hard and giving up lattes.
> If you DON'T spend $50 on lattes, then obviously you can't save that money.
I did acknowledge that if this doesn't apply to you, then it doesn't apply to you. Yes somewhere like London I imagine this might be true, although looking at the amount of people in lines in coffee shops and lunch places spending £15-20 on lunch, a lot of people it DOES apply to.
If you find it impossible, and the math doesn't work, fine. But I think a lot of people use articles like this as an excuse to never be frugal in any way.
People line up for 15-20£ lunches because they have to, because they have been forced to go back to the office to make their daily sacrifice to Micronus, the petty god of middle management, and to Parasitus, the evil god of real estate.
They may live more frugal lives, and feed themselves with close to expiration Tesco sandwiches that cost 0.01£ (why, it’s left as an exercise), but it won’t help them getting out of poverty and renting (which in itself is a form of poverty in a country where tenants can and are routinely evicted for asking repairs).
So it’s not impossible to live a more frugal life and save 5£ a day, which is less than 2000£ a year, it’s pointless if the price of the average house increases by 7-8% a year. What is one doing this for? To please the editor of the Daily Telegraph who complains about millennials?
The only way out for the individual is to earn more or to enjoy a lottery-like event, such as my company going public. The collective way out will probably require political action, of what kind I don’t know nor I care. But we can’t pretend that the better educated generation in the entire history of mankind can’t buy houses because they can’t budget and spend too much on avocados and takeaways.
>People line up for 15-20£ lunches because they have to, because they have been forced to go back to the office to make their daily sacrifice to Micronus, the petty god of middle management, and to Parasitus, the evil god of real estate.
How is going back to the office forcing you to buy £15 lunches? You don't have to even eat Tesco sandwiches. Believe it or not my parents made their own sandwiches at home, which probably has a cost of around £1 for a lunch. So you can save £10-14 on lunch. And they might actually be tastier, but again, needs personal input and work.
And your math is completely off again. £2000 per year is £20,000 in 10 years, plus interest you might have £25-30k. And you can save way more than £5 a day, easily if you actually - ACTUALLY - pay attention and have personal control.
> How is going back to the office forcing you to buy £15 lunches? You don't have to even eat Tesco sandwiches. Believe it or not my parents made their own sandwiches at home, which probably has a cost of around £1 for a lunch. So you can save £10-14 on lunch. And they might actually be tastier, but again, needs personal input and work.
You can go as far as only paying for a train ticket to get to work and rent the smallest flat in zone 4. Even assuming that you manage to survive on 40£ per day including rent (that in London buys you the lifestyle on a European agricultural worker in 1800), and that you earn an average income (35K£), you won’t save more than 1000£ per month. Which is 12K£ per year, which barely matches the average price increase of properties in London. If you earn 90K£ per annum, with this miserable lifestyle you can save 3800£ per month, which is 45K a year. So living the most miserable lifestyle possible, somebody in the 90th percentile of the income distribution, can put down a deposit to buy a 2-bed flat after 3-4 years, assuming prices stop spiralling out of control.
Considering that a millennial should live like a miserable for decades to buy a 2-bed flat that their parents could buy with a few years of savings while having normal lives, I find it extremely out of touch to claim that an entire generation (the better educated in the history of mankind, I repeat) can’t buy homes because they can’t manage their budgets.
> And your math is completely off again. £2000 per year is £20,000 in 10 years, plus interest you might have £25-30k
Which is 1/6 of the deposit you need to buy a 2-bed flat in London. So it’s 60 years for the deposit and then a 40 year mortgage. Assuming, again, that prices don’t keep doubling every 10 years.
An alternative way to look at it is you would need a 12K investment @5% to generate those $600. Now how many such $600 are lurking in your habits.
May be that would change your perspective.
I think you missed the point. Yes, forgoing discretionary spending will lower your expenses. But for most people, trimming a bit of fat out of their budgets is not going to come close to allowing them to afford a house in their city or plan for retirement. Increasing your income is much more powerful and once you increase it enough, you no longer have to go through life living like a monk. The central economic problem is that wages have been flat and housing, healthcare, and education (expenses that together dwarf discretionary) have been increasing.
Great job of completely missing the fucking point.
Also, while lattes may be a luxury from your standpoint--personally, I prefer black coffee--expensive purchases, for white collar workers, are not. You have to play those "status games" or your infinitesimal chances of getting promotions will go straight to zero. It's not always lattes. It could be something else: eating lunch with the popular kids, drinking with the bosses, etc. But you have to do it if you want any chance at all of having a career.
Furthermore, you need to take a course in remedial math. To be able to afford a starter house in the U.S. where there are decent jobs, you need to skip about (wait for it) a hundred thousand lattes. That's about 5,000 months (416 years!) of forgone coffee. The life expectancy from age 20 is about 58 years. Wrong; play again.
It's funny how Boomers and cappies love to talk about our need to take "personal responsibility" for surviving in the shit-ass world they've left us, but never consider that they should take responsibility (or be held responsible, because that's Bolshevism!) for having made the world the way it is.
If everyone took this advice, then the status games would change, because everyone would be more frugal and it wouldn't be about eating lunch with the popular kids.
But because society as a collective has decided on these games, and decided that you need credit cards, and need lattes that cost about $0.10 in raw materials at home, then everyone has to play these games.
Most importantly, if everyone refused getting mortgages, house prices would crash. But because mortgages (and low interested by the fed) have made housing more affordable to everyone, they've pushed up prices to where you're back to square one, except you have to pay interest as well as the house's price, rather than waiting until you've saved up the price. This goes back 50-100 years though.
Here's an another option: start your own business, so you don't have to play these career games.
There are a million options, it's just that they are harder, especially on a personal discipline level, which is not very popular these days.
It is not just the $50 latte but what it signifies. That expensive phone plan, car lease, gym membership, subscriptions etc. Together they would represent a few months rent which you would save otherwise. Invest that and in a decade it would matter.
Is housing unaffordable, or is it just that everyone wants to live in the same few places? That’s the impression I get in the UK. Of course the houses/neighbourhoods that everyone wants to live in will be unaffordable to most. That will always be true, basically.
When I was living and working in the UK I got that same impression. Trying to buy a property anywhere in central London is nigh on impossible. The only people living there are the very wealthy and the very poor in social housing projects.
My colleagues used to commute in by train from two hours away each day, but I'm guessing they're leaning heavily into remote work now.
There's nice areas in the UK which are dying because everyone wants to live in some metropolitan area. It's a real pity, but I can't see the trend reversing anytime soon.
Of course people want to live at a reasonable distance from their workplace. You can’t work for a FinTech startup in the City and live in Nowhereampton where rent is 100£ a month and everybody is on the dole.
So for people who choose careers where it’s important to live in a hub city, housing is increasingly unaffordable, but what about everyone else who is content with a career/job with no such restrictions? Most cities have a trendy, expensive side, but also lots of low cost areas, plus satellite towns.
There must be affordable housing everywhere (read: in every city, and multiple areas of larger cities, not literally every inch of earth) if you want to have workers in lower-wage jobs who aren't forced to spend all their non-work, non-sleep time commuting.
If it's effectively impossible to find housing in San Francisco at a price that a barista can afford, and you're OK with that, then you're saying it's OK for San Francisco to have no baristas. (Or for baristas to be homeless.)
Whether it's lattes, I don't even drink caffeine, or avocado toast (I used to eat this frequently to spite this adage) narratives, it's all in the attempt to justify the perpetual consolidation of wealth in developed countries: I think the avocado toast was from a real estate guy in Australia doing his best to tell people about pulling up by the bootstraps.
The truth is that the lower rungs of the economy have been sacrificed in order to cater to the upper classes, and it has been this way since Reagan-Thatcher were in office. This has always existed before, but at no point in time has it been this blatant where failing up because of your social status has been this prevalent for the upper class, and whether it's University admission scams, white collar crime, to economic malfeasance... there is no limit to what length they will go to skew the game in their favour.
I think if people are being honest with their children in the developed Western World is that they should be optimizing them to either take over a family owned and operated business if it exists, or simply to teach them to have skills in which they can bypass the university debt trap and travel abroad and work remotely in order to maybe settle elsewhere, because this insanity has gone on for far too long.
Career building implies their is some integrity in the system but when it's built on nepotism and corruption one has to ask the very obvious question: why is this worth investing my child's life into? And who benefits the most for this?
As a millennial from the US that studied STEM and worked in my field, and eventual became an entrepreneur in fintech and hired both local and international talent: my country failed me every step of the way. It never failed to hinder or prevent my ability to excel in anything that didn't first serve the interests of multinational corporation(s) or the business interests of someone who 'played the game.'
Venturing out on my own and finding my own path in 2012 after paying off tons of student debt was not recreational, it was foreshadowing what I thought was happening in just the US but in most developed nations: self-cannibalization.
Politicians and the Boomers who elected them had access to cheap credit and stable careers that allowed for some savings were able to leverage that and have a glut of viable tenets pay not just for their mortgages by renting out rooms at inflated costs, but their very lifestyle.
It disgusted me to my core how brash and calloused people had become that they'd exploit education and housing to such a degree under the pretense of 'getting mine' when they were handed it on a silver platter all while simultaneously thinking this was achievable based on merit. The last landlord I had literately moved in his ex-wife unbeknownst to us and then subsidized her expenses based on increasing rent costs during COVID as we didn't chose to take advantage of the rent relief option.
I lost all respect for this class of individual and I now want to see them get economically ruined as I think it's the only chance for any level of reform at this point: mass homelessness and unemployment from 2008-COVID onward didn't change anything, a perpetual bondage based University debt system hasn't changed anything, lower standards of living and shorter life expediencies for Millenials and likely Gen Z hasn't either. I've come to the conclusion that nothing less than the significant die off, or in this case financial ruin, of the affluent boomer will lead to any significant reform.
> Once you have your revenge on boomers, you’re the next enemy in line if not on the list already.
I'm not out for revenge, I now have abject apathy for their plight and alarming as it is I think I've come to the stark realization that I'm comfortable with saying/knowing that we will be significantly better off when they are no longer here.
As far as being 'on the list' have a look at my bio and posts.
I've spent time in many other Industries and I have, admittedly unlike many of my cohort, learned to live with less in Life and I have no need for opulence or descendant lifestyles: I have no interest in consumerism and have been mainly focused on environmental activism. I have been called a 'prince' but then I show them both my physical and emotional scars most usually realize that they wouldn't want to go through what I went through rather quickly.
Before working in high-tech, I worked in retail for a short while.
My experience is in retail or other lower-paid jobs it's almost impossible to save money, and not because of the salary.
I found I needed to 'reward' myself almost everyday with a relatively expensive thing to keep going. An expensive coffee, 'fancy' meal (think more expensive than the 3.50 sandwich+drink combo I could afford).
Interestingly, working in tech, I never needed any of this.
The system is designed that way. Will power is a finite resource, and people get pummeled so hard at work, their need to execute what tiny bit of freedom they can scrape off the world results in their eating a tasty but unhealthy lunch at a chain restaurant to "treat themselves". Our whole society wouldn't function if people weren't exhausted to the point where their brains malfunction and they make bad choices.
Wait till they bring Jira and Agile to your tech job, though. You'll find yourself "needing" expensive toys again.
Oh they have, and to top if off, we have a daily 'standup' for about 1.5-2 hours (yep) every day.
Still, since I'm in the comfort of my home, and my work is relatively well interfaced meaning I only need to really speak to the backend and product people, the mental drain is so much less compared to the brutality of engaging with the general public.
I can't find the original source now, but millenials spend significantly less than boomers did on eating out and entertainment. The biggest delta was healthcare, which millenials spent, if I remember correctly, over twice as much monthly on.
Couple that with all time high income to housing price ratios[1], higher than 2008 housing bubble, and the idea that lattes are the problem is asinine.
I dunno, after growing up ~poor and now working in tech I am still acutely aware of prices. Because I have to make an effort to tell myself I can afford things easily, many of my purchases tend to be baseline-cheap or with no concern for the price, with less middle ground than one would expect. Sometimes I have relapses when I pick up my usual fancy coffee bag and I'm like "why are you buying fancy coffee, the store brand has twice as much beans for the same price", so I have to be like "it's ok, whatever, I can afford it". Which is probably also not too healthy.
Still, with that background, I do notice things... Like e.g. someone I know who grew up lower middle class in America (n=1, admittedly) being surprisingly oblivious of prices in the grocery store. Buying $7 artisanal ice-cream when $3 ice-cream is just as good - it's literally $100/mo right there, just on one item. Sure, they can easily afford it now, but I wonder if the notion that it costs $100/mo even crosses their mind in any way. I see people who look like they are homeless (there's a big extremely-affordable-housing apartment building next to the store) buying fancy beer... when I was poor I was drinking Bud Light equivalent ;) I am only slightly judging - to each their own, but then, it might indeed cramp your spending elsewhere.
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[ 3.9 ms ] story [ 204 ms ] threadThis is still true, though. When I turned 40 in 1994, I decided I had lived with debt long enough. So I sold my plane. my boat and my 2nd house. In the next four years, I paid off the remaining mortgage on my 1st house and installments on my cars and credit cards. Was it hard? Yes, it was damn hard. It's like kicking a habit like a drug addiction, but the drug is easy credit.
I never went into debt again.
If only they’d saved with that money instead paid it as interest on the boat they never used anyhow
Have an upvote, good sir.
Other economists and politicians posit this won't happen and then proceed to do it, and then inflation happens, and then all of a sudden nobody could have predicted it, it is transitory (until it clearly is not), it is caused by Putin (except not according to the fed chair), it is because the economy is in transition, etc etc.
How about, don't pump metric shit-tons of money into the economy and see how that works.
And while you are at it, maybe don't make a campaign promise to end fossil fuels and act all surprised when the prices for fossil fuels go through the roof. I'm as happy as the next person to see the end to carbon emissions, but I don't do everything I can to end it and then whine about it ending .
Only if velocity stayed constant.
Problem is, velocity plummeted with the lockdowns. But now it might be coming back up.
https://fred.stlouisfed.org/series/M2V
Edit: nope. Looks like GDP Now shows the GDP is still dropping.
https://www.atlantafed.org/cqer/research/gdpnow?panel=3
This is the ridiculous issue with this MMT theory. How the hell can you be so stupid to assume that just because money velocity is slow now, and you pump lots of money into the system (actually you give it to financial companies, another red flag), it won’t cause inflation in a few years when things pick up?
Especially after a pandemic?
It went up by 500% since March 2020 btw, not just 100%, or 200%: https://fred.stlouisfed.org/series/M1SL
As far as I can tell, economists believe that pumping money into the economy only explains hyper inflation, not low or moderate inflation
Inflation in the US has been pretty stable for the last few decades
But I guess those people should just be grateful it was not higher before, and just be less greedy.
2. Why did prices for pretty much everything go up the week, or two, after the media started talking about the war, supply chain problems, and government spending?
Prices were pretty steady during Covid, at least on food, and gas, and most consumer products, except building materials, and appliances.
I personally think corporations used the war, and Covid, to raise prices seemingly overnight. My Chevron station went from $4.29 to $6.25 in a day.
These companies made record profits during Covid, but poof in a couple of weeks just blew up their pricing?
I think they used found a few good excuses to raise prices; and they all fell in line.
Kinda like my $5.49 rebate on my $800/yr. insurance policy at the beginning of Covid. Mercury by the way, and they used to be fair.
Yea, I was uncomfortable with Powell throwing money at the stock market, and buying all those mortgage backed securities, when housing and the stock market thrived during Covid. His response was, 'I kept my agreement with the financial sector.'
Weird times for sure.
An everlasting asset bubble and money at 0% is not sustainable and never has been.
But none of that is sufficient for inflation to occur. Inflation is a fall in the value of a unit of currency. In your terms, it can only occur when currency supply is higher than currency demand.[1]
But in other terms, while it is true that shortfalls in the supply of food, oil, and circuitry lower the value of a dollar, it is not true that they are able to cause inflation; if the number of dollars is lowered commensurately with the loss in value, that will offset the effect.
Talking in terms of the currency often puts the issue backwards.
So? It's not maintaining its value. Who cares whether it's maintaining its value measured in baht? That would just mean the baht is also losing value.
And it's also true that the pound sterling can experience inflation while maintaining its exchange rate against the Thai baht.
But those two things cannot happen simultaneously; if the pound is experiencing inflation and maintaining its exchange rate with the baht, then the baht is also experiencing inflation.
a currency is "devalued" by, eg., money printing, only in the sense that eventually the new cash drives prices up
when speaking about "inflation" we're always talking about some sets of prices... even in the case of "general inflation", this does not mean global prices for all products -- it means a certain subset, eg., CPI
so the GBP can maintain its value in many senses whilst the person-on-the-street experiences CPI.. the value of GBP isnt only in "general purchasing power relative to market relative to baskets"
trivially, arbitrage opportunities do exist, markets aren't perfectly efficient.. so there can be cases where UK CPI inflation is "ahead of the global curve"
I'm not sure this statement makes that much sense, won't demand always go up when prices drop, and drop off when it goes up? Demand does not exist in abstract, if I could get an iPhone 13 pro for $10 I would take 5, if it costs $2,000 I will take 0. If oil cost $1 a gallon instead of $4, won't the demand increase? And if it is $10 a gallon won't the demand decrease?
Maybe to simplify, cite something that backs your claim that demand is higher than supply.
And then maybe further, can you clarify: will demand not increase when people are given more money? Won't for example trillions of direct and indirect stimulus drive up demand? And if price stays constant won't the increase in demand not have to result in prices going up in order to avoid supply shortages?
Maybe this is an aside to you, but would you expect heating cost to increase or decrease if you are using fossil fuels for heating, and the government has promised to end fossil fuels?
I guess we can point all fingers to Putin, but decreasing the supply of fossil fuels seems to be an implicit campaign promise of the Biden administration, and he has the most popular administration in history, so I'm not sure why people are upset with paying more for heating and gas.
I see the data quite differently. No President since World War II ended has a lower approval rating on day 523 of their administration.
https://projects.fivethirtyeight.com/biden-approval-rating/
What accomplishment does Biden have that's going to counterbalance how pathetic his administration's response to the repeal of Roe v. Wade appears? It's become a meme among the left that the only thing the Democrats had prepared in response were fundraising letters.
Well he is not if you take the poll numbers, but as Biden has said, the low poll numbers are mainly a side effect of the negative sentiment for his administration in the right wing media. You will need to compensate for this to get an accurate picture.
"Compensating" for perceived reasons why a President is not liked, admired, or supported seems antithetical to the goal of measuring popularity. That would seem to me more like "fudging the data" (if I'm being polite) or "making shit up" (if I'm going for clarity).
No, this was just a lie though, the media has always been right wing, they lie and say they are not, but they are.
> What accomplishment does Biden have
He ended COVID, he pulled out of Afghanistan, he restored US reputation on the global stage, he put Russia in it's place, he was busy ending fossil fuels. I dunno there are many things, you just don't hear of them because the media is trying to tank his presidency.
I'll grant that he was more competent at administrating the response than Trump, but COVID hasn't ended, the pandemic is still in progress.
>he pulled out of Afghanistan
Yes, but it was a humanitarian disaster. You can argue that he shouldn't be blamed for that, and I might agree, but it didn't make him look good even when reported on honestly.
>he restored US reputation on the global stage
Citation needed. NATO got a credibility boost from Russia's invasion, but the US wound up looking weak and indecisive. And I don't think you can restore the stain on America's reputation that was Trump so easily, or unburn that many bridges. Maybe, if Trumpists don't take power again in 2024, but at the moment being the country in which guns have more rights than women (and soon to be LGBTQ and black people) is not good optics.
>he put Russia in it's place
In what sense? Is Russia's "place" right on top of Ukraine? Did I miss the news about the American negotiated surrender and Russian retreat? I don't understand.
He gave US the vaccines, without which the pandemic would have been much worse.
> > he pulled out of Afghanistan
> Yes, but it was a humanitarian disaster.
No it was not, this is just further misrepresentation by the media.
> > he restored US reputation on the global stage
> Citation needed.
https://apnews.com/article/government-and-politics-donald-tr...
> > he put Russia in it's place
> In what sense?
He sanctioned norstream 2: https://www.theguardian.com/us-news/live/2022/feb/23/biden-u...
Also he said he will make Russia pay for election interference [1].
[1]: https://edition.cnn.com/2021/03/17/politics/joe-biden-vladim...
That can be caused by supply-side inflation, eg., a sudden general drop in supply. Or demand-side, a sudden general increase in available cash.
Central banks increasing money supply is demand-side inflation. The issue with this, as a "final theory", is the last decade+ where it didnt hold; and in japan where inflation and money supply are entirely uncorrelated.
The only difference today, with inflation, is the supply-side shock. If central bank policies were causing inflation, they'dve caused it over the last decade; and likewise in japan.
Whilst central bank policies have raised asset prices, etc. there's very limited evidence they've raised, eg., the CPI
https://fred.stlouisfed.org/series/M1SL
They money supply (M1SL) increase by 500% since March 2020 - don't tell me that this is purely a supply side shock.
Or at the very least cite something that shows supply has dropped. And then explain to my why policies that increase the money supply by 500% is not expected to cause historic inflation while a pandemic is affecting supply?
However, we should be careful not just to say inflation is caused by the money supply. This is a theory of why inflation could occur, it isnt inflation. Inflation is just the general rise in prices.
Given that everything is suddenly more expensive when energy prices rise (since energy is required for everything), etc. And given supply chain crises, etc.
We are seeing a case where the supply-side is undergoing huge general shocks. If you want to say that M1 has caused a demand-side inflation, fine... but it seems to me that 1/2ing the price of oil would 1/2inflation; whereas doubling interest rates wont.
So if money supply is the cause of inflation, interest rates will entirely solve the problem. If the supply-side is, then it wont.
I'd place a large bet on supply side being the major part. I think 1/2ing oil price would take inflation down to (4-6)%, at which interest rates would then be effective.
I would like to see some evidence for this, as I don't think this is the case, I think this is just propaganda from fossil fuel companies and their political allies. Like Biden said the economy is just in transition. I think restricting oil and gas supply further will be much more more likely to lower inflation. Maybe Biden should outlaw all oil refining on US soil to help drive the transformation faster.
If people were just less greedy and cared more about the environment than their wallets then they would buy electric cars instead of driving gas guzzling SUVs that are destroying our planet.
Does it work like that in real world? If gas price doubles does that mean that folks who commute by car go only half way to work or stay at home every other day? If an iPhone costs $10, why would you buy 5 of them? What would you do with extra four? Browse hn on five screens at once?
Supply and demand are not infinitely elastic, as some like to think.
There are a lot of behavior that can be changed, not all of it, but people could skip some trips, maybe only 10% - but it is not 0%.
> If an iPhone costs $10, why would you buy 5 of them?
I have 5 umbrellas but just one body. I sometimes forget it at some place, or misplace it. Nice to have a spare when I need one. I could then leave an iPhone at work for when my battery runs out for example.
> Supply and demand are not infinitely elastic, as some like to think.
Fair enough, my examples were a bit contrived and absurd, but my point is more just that neither supply nor demand is fixed. But yes they are not infinitely elastic, but they are somewhat elastic.
My reading of the figures is US supply has either recovered or is limited because of restricted imports (chips etc)
If you create policy that deter investment in fossil fuels, and reduce production, would you expect prices to go up or down? And if you don't create policy to deter investment and reduce production, then how will you end fossil fuels?
Maybe a better question to ask is, do you think there is any way to end fossil fuels other than having it be more expensive than alternatives?
Why would the government resume leasing for oil and gas drilling on federal lands if they don't think stopping it affected the supply [1]? Is it just because they really want to mess the climate up some more and break campaign promises?
[1]: https://www.nbcnews.com/politics/politics-news/biden-adminis...
As for ending fossil fuels , I never commented on that nor am I an expert in the field so I won't make any claim
But I guess the media has been incredibly negative towards the Biden administration and not giving him credit for the good things he has done, so I'm not surprised that people don't recognize or appreciate the work he has done to end fossil fuels.
https://www.politifact.com/truth-o-meter/promises/biden-prom...
Here's a few related to the environment
----
Rejoin the Paris climate agreement
U.S. formally rejoins Paris Climate Agreement | May 21, 2021
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Put US on a course to net-zero emissions by 2050.
Joe Biden’s moves start the US toward net-zero carbon, but Congress is key | January 27, 2021
--
Establish new fuel economy standards
EPA tightens fuel efficiency rules for cars and light trucks | January 11, 2022
--
Give disadvantaged communities 40% of spending benefits related to clean energy
Congress holds key on clean energy dollars to poorer communities | July 20, 2021
###
There are four related to the environment that I can see. He's rejoined the paris aggreement and had then EPA increase fuel economy. The other two haven't been done ..yet.
What promise did he break? If he is anti climate what are you comparing him too? The past president left the Paris agreenment.
Well like I said I still think he is the best president ever, but In my view allowing new leases on federal land[1] and asking oil companies to boost supply[2] is breaking his campaign promise to end fossil fuels[3].
But I understand this may be entirely due to my own biases, and I don't want to malign him, like I said I think he is without question the best president ever and I do not mean to suggest I doubt this for one moment. I would of course prefer that he did not allow new leases on federal land but I can see that I should maybe listen to what others think and consider how this is maybe just a better way to keep his promise than what I have considered. And to be fair I'm not entirely sure that the promise to end fossil fuels is not a right wing smear against him, this could very well be the case.
[1]: https://www.cnbc.com/2022/04/15/biden-administration-to-resu...
[2]: https://edition.cnn.com/2022/06/15/politics/joe-biden-oil-co...
[3]: https://apnews.com/article/9dfb1e4c381043bab6fd0fa6dece3974
But as you rightly point out there are so many that he has kept that one hardly makes a difference and he still is the most popular president ever so I don't mean to disparage him.
Anyway, I think the reason behind the inflation is not that the amount of cash is to high. Wages have not grown accordingly and demand has not gone up. But due to Covid, supply chain issues (related and incidental), international conflict, etc., we have just been producing less stuff.
So I would say the inflation of some goods (housing) is due to the simmering financial crisis, and the inflation of others (like wheat, cooking oil, electronics) is due to political strife and economic instability.
Okay, but ... if you just pumping money into the economy, are you not by definition just pumping money into the economy, as opposed to goods and money? If congress could by decree make goods why would anyone need to work?
I'm not sure demand driven inflation (= money supply driven) is a relevant problem at the moment. On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages.
Even if there was no direct stimulus, which there was, companies don't just take stimulus, put it in their bank account and forget about it. But sure, if you have some evidence to suggest that this money never really entered circulation I think it would help your case.
The reality is though, money supply increases by 400% since March 2020 and historic inflation followed. There may be other reasons, but I'm not sure what you would expect to see other than inflation.
> On the contrary I sometimes suspect it is a bogeyman used to justify not raising wages.
Wages have increased have they not? This is another signature achievement of the much maligned Biden administration, that the media is trying to hide. Wages are at historically high levels.
Some points:
Deflation is bad for the economy, you want moderate inflation.
Increasing the money supply is a prerequisite for inflation, but not the cause. The euro zone increased it‘s money supply enormously for mor than a decade and - until last year - had problems meeting it‘s 2% a year inflation goal.
Increasing the money supply allows for cheap investments for both the state and private business. If the investments provide a net benefit to the economy (e.g. infrastructure) you should just do them. “Anything we can actually do we can afford.” - Keynes
I would recommend people start with some normal economics before they get into the economic homologue of urine therapy.
https://realprogressives.org/podcast_episode/episode-173-inf...
There's a well sourced explanation in this video regarding the price of fuel that I really enjoyed. https://youtu.be/QnBqAzJXVGo There's also previous ones dealing with oil drilling.
The tldr idea is that the US could drill more to satisfy the supply right now, but oil corps like money and high oil prices give them that. And that's regardless of the demand going down over years - the drilling rights are already in place.
Money has started feeling like a joke. It's thrown around for anything and everything.
An ERC-20 memecoin called Shiba Inu hit a market cap of $41B. A dying video game retailer hit a market cap of nearly $30B. A taxi aggregator swallowed $33B in funding and never turned a dime in operational profit in 12 years of its existence. A house bought in 2019 doubled in price in under 2 years.
Its complete and utter insanity.
Can’t speak to how it will end up working, but its definitely not a surprise.
Problems of that scale cannot be tackled by changing individual spending. You could move somewhere else (if you can actually afford to do so), but the problem is not limited to one region.
It obviously does not. The cost to purchase an entire house and the land it sits on is at that multiple or slightly more. The cost to merely use the median rental for a year is under the median income.
Where is this magical place?
They are also are ignoring inflation and all the companies using the Ukraine war and the lockdown to justify the price multiples.
While all are hitting record profits.
Rent, not mortgages, has gone up from 1k to 2.5k here. For a one bedroom apartment. Minimum wage here will get you ~2k/mo.
Minimum wage doesn't come close to hitting rents, especially when they have insane demands like you must make 4x the rent to even apply.
It's hilarious that landlords were crying they couldn't rent their places out because of coronavirus, then they increased their rents 2-4x, the places are still empty- as are the houses for sale, yet they seem fine with empty property now.
I'd always laugh at the articles saying there wasn't a grand exodus from California, as I see it every day. Still to this day, just not as many.
Where did they go? Texas for the most part. And what happened to Austin? Priced locals out. Now those Texans are moving, but not here, they can't afford the exorbitant prices of everything ($7/gal for gas!).
Many Texans are still making $7.25/hr. How tf can anyone afford to live with that? Cell phones cost the same, power costs the same, rent is getting there, internet costs the same as here in California where at least minimum wage is ~$15/hr.
Poor people have been getting shit on since before the pandemic but now it's just evil what's happening.
A few posts ago, it was "median rent costs double (or tripple, or more) the median income". Now, it's "rent is about the same as minimum income" (which is still a problem, but nowhere near the same thing as the prior claim).
Sadly this time there is no "New World" to flee to for economic prosperity. This whole middle class thing might have been an anomalous blip?
Buy lattes and consider moving to where housing supply is not constrained.
You can also inherit one, rent something or move where houses are cheaper. I'm not sure about the level of your irony so I clarify.
I wish it were that easy to grind this economy to a halt, but it doesn't really work that way. Consumer shortfalls cause hiccups in the system, but the ruling class is still making steady progress on its mission to reduce the rest of us to generational peonage. You can boycott Black Friday, but so long as you have to show up for work to survive, the bad guys are going to keep winning.
* When the first cars started killing people -> make jaywalking a crime.
* When people take on too much credit card debt -> obviously a problem with financial literacy
* When large companies destroy the environment -> if people just recycled more we could save the planet...
* You're broke in 1990 -> why didnt you get a degree?
* you're broke in 2000 with a degree -> why didnt you get a STEM degree?
* you're broke in 2010 with a STEM degree -> why didnt you get a compsci degree?
* You're broke in 2020 with a compsci degree -> tsk you should have done something useful like machine learning.
* Global warming -> Stop using your car and planes
* Plastics everywhere -> Just stop using plastic straws and bags, that will fix it!
...i know, i know right... why didnt I just take personal responsibility and not take a job at a horrible company that pollutes? Thats how I could do my bit.
Being an environmentalist 5th column is probably the way to go, actually.
According to the investment/FIRE communities and Thomas Piketty's study, yea, you're better off siphoning off taking the fruits of others' work via "the magic of compounding".
Well blaming others for your problems and leeching off society for income isn’t going to get you very far.
Basically, these things look anti-inductive.
Also:
* You're broke in 2030 with a machine learning degree -> you should have been born a robot.
> * you're broke in 2000 with a degree -> why didnt you get a STEM degree?
> * you're broke in 2010 with a STEM degree -> why didnt you get a compsci degree?
> * You're broke in 2020 with a compsci degree -> tsk you should have done something useful like machine learning.
LOL. I like it. reads a bit like "First they came for the..."
As a "not broke yet" (by British standards) computer scientist, having jumped all these hoops and many more, I'm just wondering what the next ominous step is?
I fear this ends like:
You're broke in 2048 with a CS degree, PhD in DSP and a successful research career in signals and systems - because you didn't throw all human values to the wind and join a cabal of psychopathic technical elites hell-bent of subverting the entirety of science and technology to an infantile, omnipotent project of world-domination that ultimately added no value, screwed the entire planet and human race.
(and for those also with PhDs in ML/DSP smugly working for the Empire, and thinking "I'm safe", your turn comes when abject obedience is insufficient to save you from the sinking ship)
Still, being frugal is not a bad advice and will definitely help you save money.
What's the mental health cost though?
That latte or that luxury item can be what keep you sane in a world that become increasingly worse.
Lattes, pr0n, weed, alcohol. They definitely have their pro and cons, but they may be needed at certain times of your life. If they start ruining your life, seek help.
But on a micro level, you can't get around the fact that if you spend $50 on lattes a month, and then you stop doing that, you will have $50 more per month.
And if you spend $50 on buying a luxury brand shirt rather than a $10 shirt, you have $40 less.
If you DON'T spend $50 on lattes, then obviously you can't save that money.
Anything else is self flaggelating excuses about why you need to buy lattes, and why capitalism is bad, and an excuse for your status games or your consumer desires. Fact is, if you buy lattes, you can save that money instead.
But btw, $50 a month means $50 extra you can spend on mortgage payments, which can actually add a couple of thousand dollars to your budget potentially.
I find extremely dishonest and patronising to suggest that people can’t buy houses because they spend too much on avocados or Netflix. Even if one spent 5000£ a year on these, which is an order of magnitude too high for the average earner, it’s still going to take them 40 years of monastic life to save 200K£.
I’m out of that infernal loop only because a few years ago my salary jumped above 250K£ and I’ve made 200-300K£, after tax, in a single year when my employer did its IPO. Let’s not pretend that the average person can buy a half decent family home in a decent part of the UK just by working hard and giving up lattes.
I did acknowledge that if this doesn't apply to you, then it doesn't apply to you. Yes somewhere like London I imagine this might be true, although looking at the amount of people in lines in coffee shops and lunch places spending £15-20 on lunch, a lot of people it DOES apply to.
If you find it impossible, and the math doesn't work, fine. But I think a lot of people use articles like this as an excuse to never be frugal in any way.
They may live more frugal lives, and feed themselves with close to expiration Tesco sandwiches that cost 0.01£ (why, it’s left as an exercise), but it won’t help them getting out of poverty and renting (which in itself is a form of poverty in a country where tenants can and are routinely evicted for asking repairs).
So it’s not impossible to live a more frugal life and save 5£ a day, which is less than 2000£ a year, it’s pointless if the price of the average house increases by 7-8% a year. What is one doing this for? To please the editor of the Daily Telegraph who complains about millennials?
The only way out for the individual is to earn more or to enjoy a lottery-like event, such as my company going public. The collective way out will probably require political action, of what kind I don’t know nor I care. But we can’t pretend that the better educated generation in the entire history of mankind can’t buy houses because they can’t budget and spend too much on avocados and takeaways.
How is going back to the office forcing you to buy £15 lunches? You don't have to even eat Tesco sandwiches. Believe it or not my parents made their own sandwiches at home, which probably has a cost of around £1 for a lunch. So you can save £10-14 on lunch. And they might actually be tastier, but again, needs personal input and work.
And your math is completely off again. £2000 per year is £20,000 in 10 years, plus interest you might have £25-30k. And you can save way more than £5 a day, easily if you actually - ACTUALLY - pay attention and have personal control.
That's getting close to a deposit on a house.
You can go as far as only paying for a train ticket to get to work and rent the smallest flat in zone 4. Even assuming that you manage to survive on 40£ per day including rent (that in London buys you the lifestyle on a European agricultural worker in 1800), and that you earn an average income (35K£), you won’t save more than 1000£ per month. Which is 12K£ per year, which barely matches the average price increase of properties in London. If you earn 90K£ per annum, with this miserable lifestyle you can save 3800£ per month, which is 45K a year. So living the most miserable lifestyle possible, somebody in the 90th percentile of the income distribution, can put down a deposit to buy a 2-bed flat after 3-4 years, assuming prices stop spiralling out of control.
Considering that a millennial should live like a miserable for decades to buy a 2-bed flat that their parents could buy with a few years of savings while having normal lives, I find it extremely out of touch to claim that an entire generation (the better educated in the history of mankind, I repeat) can’t buy homes because they can’t manage their budgets.
> And your math is completely off again. £2000 per year is £20,000 in 10 years, plus interest you might have £25-30k
Which is 1/6 of the deposit you need to buy a 2-bed flat in London. So it’s 60 years for the deposit and then a 40 year mortgage. Assuming, again, that prices don’t keep doubling every 10 years.
10cm 1kg 5£
Also, while lattes may be a luxury from your standpoint--personally, I prefer black coffee--expensive purchases, for white collar workers, are not. You have to play those "status games" or your infinitesimal chances of getting promotions will go straight to zero. It's not always lattes. It could be something else: eating lunch with the popular kids, drinking with the bosses, etc. But you have to do it if you want any chance at all of having a career.
Furthermore, you need to take a course in remedial math. To be able to afford a starter house in the U.S. where there are decent jobs, you need to skip about (wait for it) a hundred thousand lattes. That's about 5,000 months (416 years!) of forgone coffee. The life expectancy from age 20 is about 58 years. Wrong; play again.
It's funny how Boomers and cappies love to talk about our need to take "personal responsibility" for surviving in the shit-ass world they've left us, but never consider that they should take responsibility (or be held responsible, because that's Bolshevism!) for having made the world the way it is.
But because society as a collective has decided on these games, and decided that you need credit cards, and need lattes that cost about $0.10 in raw materials at home, then everyone has to play these games.
Most importantly, if everyone refused getting mortgages, house prices would crash. But because mortgages (and low interested by the fed) have made housing more affordable to everyone, they've pushed up prices to where you're back to square one, except you have to pay interest as well as the house's price, rather than waiting until you've saved up the price. This goes back 50-100 years though.
Here's an another option: start your own business, so you don't have to play these career games.
There are a million options, it's just that they are harder, especially on a personal discipline level, which is not very popular these days.
Remote work may somewhat alleviate the problem, though it will take time and it won't dissappear entirely.
My colleagues used to commute in by train from two hours away each day, but I'm guessing they're leaning heavily into remote work now.
There's nice areas in the UK which are dying because everyone wants to live in some metropolitan area. It's a real pity, but I can't see the trend reversing anytime soon.
Maybe because
> My colleagues used to commute in by train from two hours away each day
?
If it's effectively impossible to find housing in San Francisco at a price that a barista can afford, and you're OK with that, then you're saying it's OK for San Francisco to have no baristas. (Or for baristas to be homeless.)
The truth is that the lower rungs of the economy have been sacrificed in order to cater to the upper classes, and it has been this way since Reagan-Thatcher were in office. This has always existed before, but at no point in time has it been this blatant where failing up because of your social status has been this prevalent for the upper class, and whether it's University admission scams, white collar crime, to economic malfeasance... there is no limit to what length they will go to skew the game in their favour.
I think if people are being honest with their children in the developed Western World is that they should be optimizing them to either take over a family owned and operated business if it exists, or simply to teach them to have skills in which they can bypass the university debt trap and travel abroad and work remotely in order to maybe settle elsewhere, because this insanity has gone on for far too long.
Career building implies their is some integrity in the system but when it's built on nepotism and corruption one has to ask the very obvious question: why is this worth investing my child's life into? And who benefits the most for this?
As a millennial from the US that studied STEM and worked in my field, and eventual became an entrepreneur in fintech and hired both local and international talent: my country failed me every step of the way. It never failed to hinder or prevent my ability to excel in anything that didn't first serve the interests of multinational corporation(s) or the business interests of someone who 'played the game.'
Venturing out on my own and finding my own path in 2012 after paying off tons of student debt was not recreational, it was foreshadowing what I thought was happening in just the US but in most developed nations: self-cannibalization.
Politicians and the Boomers who elected them had access to cheap credit and stable careers that allowed for some savings were able to leverage that and have a glut of viable tenets pay not just for their mortgages by renting out rooms at inflated costs, but their very lifestyle.
It disgusted me to my core how brash and calloused people had become that they'd exploit education and housing to such a degree under the pretense of 'getting mine' when they were handed it on a silver platter all while simultaneously thinking this was achievable based on merit. The last landlord I had literately moved in his ex-wife unbeknownst to us and then subsidized her expenses based on increasing rent costs during COVID as we didn't chose to take advantage of the rent relief option.
I lost all respect for this class of individual and I now want to see them get economically ruined as I think it's the only chance for any level of reform at this point: mass homelessness and unemployment from 2008-COVID onward didn't change anything, a perpetual bondage based University debt system hasn't changed anything, lower standards of living and shorter life expediencies for Millenials and likely Gen Z hasn't either. I've come to the conclusion that nothing less than the significant die off, or in this case financial ruin, of the affluent boomer will lead to any significant reform.
Once you have your revenge on boomers, you’re the next enemy in line if not on the list already.
“Stare into the abyss..” and all that.
I'm not out for revenge, I now have abject apathy for their plight and alarming as it is I think I've come to the stark realization that I'm comfortable with saying/knowing that we will be significantly better off when they are no longer here.
As far as being 'on the list' have a look at my bio and posts.
I've spent time in many other Industries and I have, admittedly unlike many of my cohort, learned to live with less in Life and I have no need for opulence or descendant lifestyles: I have no interest in consumerism and have been mainly focused on environmental activism. I have been called a 'prince' but then I show them both my physical and emotional scars most usually realize that they wouldn't want to go through what I went through rather quickly.
Wait till they bring Jira and Agile to your tech job, though. You'll find yourself "needing" expensive toys again.
Couple that with all time high income to housing price ratios[1], higher than 2008 housing bubble, and the idea that lattes are the problem is asinine.
https://www.longtermtrends.net/stocks-to-real-estate-ratio/
Still, with that background, I do notice things... Like e.g. someone I know who grew up lower middle class in America (n=1, admittedly) being surprisingly oblivious of prices in the grocery store. Buying $7 artisanal ice-cream when $3 ice-cream is just as good - it's literally $100/mo right there, just on one item. Sure, they can easily afford it now, but I wonder if the notion that it costs $100/mo even crosses their mind in any way. I see people who look like they are homeless (there's a big extremely-affordable-housing apartment building next to the store) buying fancy beer... when I was poor I was drinking Bud Light equivalent ;) I am only slightly judging - to each their own, but then, it might indeed cramp your spending elsewhere.