Re:America's 1% Has Taken $50T From the Bottom 90%
by jb775 on Thursday February 11, 2021 @07:12PM
(#26109326)
What's a good hedge against the Cantillon Effect?
Re:America's 1% Has Taken $50T From the Bottom 90%
by pjmorris on Thursday February 11, 2021 @07:44PM
(#26109525)
My own personal favorite notion of a hedge for this is wages. Boost wages to match the money supply, and most of those wages will get spent across the economy as well as providing for the wage earners. Of course, this is what many more economically-educated people than I warn against.
Re:America's 1% Has Taken $50T From the Bottom 90%
by jb775 on Friday February 12, 2021 @01:41AM
(#26111266)
Employees can't control their own wage increases though..but it explains why job hopping is prevalent and understandable nowadays as the only realistic way to keep up.
Increasing minimum wage would definitely increase money spent throughout the economy, but I think business owners would offset that cost by creatively reducing/stagnating pay and benefits for middle-class type roles. And the resulting extra demand (without extra supply) would prob lead to higher prices for common goods/services (even more inflation), therefore compounding the issue we are discussing now. On top of that, a big chunk of the extra minimum-wage money spent (by the employees) will end up in the pockets of the richest as they "reinvest profits back into the business". IMO this is essentially transferring wealth from the middle-class to the upper-class via extra money paid to the lower-class.
Re:America's 1% Has Taken $50T From the Bottom 90%
by pjmorris on Saturday February 13, 2021 @10:51AM
(#26124274)
My personal favorite way for boosting wages would be a job guarantee. Hand-wavy explanation: Having the government hire people who can't find work elsewhere puts a floor on both unemployment and on the minimum that other entities have to provide in a job. More detail in this interview [0] of Pavlina Tcherneva, author of 'The Case for a Job Guarantee' by Mark Blyth (the most entertaining political economist, IMO.)
[0] https://soundcloud.com/rhodescenter/is-now-the-time-for-a-fe...
Re:America's 1% Has Taken $50T From the Bottom 90%
by pa7x1 on Friday February 12, 2021 @02:49AM
(#26111520)
Having more injection points, for example, UBI.
Re:America's 1% Has Taken $50T From the Bottom 90%
by lallysingh on Thursday February 11, 2021 @08:02PM
(#26109670)
I think the best option is to stop the injection and let the natural price inflation (from raises in population and efficiency) catch up.
Re:America's 1% Has Taken $50T From the Bottom 90%
by bseidensticker on Thursday February 11, 2021 @07:21PM
(#26109390)
Inject the money somewhere else? UBI perhaps?
Re:America's 1% Has Taken $50T From the Bottom 90%
by jb775 on Thursday February 11, 2021 @07:34PM
(#26109474)
I mean as a personal investment hedge to protect against the artificial inflation
Re:America's 1% Has Taken $50T From the Bottom 90%
by pjmorris on Thursday February 11, 2021 @07:50PM
(#26109585)
IMO the way to decide that follows from questions like: What does the Fed buy? Second question: What do the sellers to the Fed buy (where do they spend the proceeds?), and wherever the spending chain goes from there. To my eye, stocks and real estate, at least right now.
Re:America's 1% Has Taken $50T From the Bottom 90%
by throwaway09223 on Thursday February 11, 2021 @07:47PM
(#26109557)
Borrow money.
Re:America's 1% Has Taken $50T From the Bottom 90%
by MrMan on Thursday February 11, 2021 @11:38PM
(#26110789)
And invest it in startups
Re:America's 1% Has Taken $50T From the Bottom 90%
by Thorrez on Friday February 12, 2021 @02:56AM
(#26111555)
Just invest in the stock market. That protects you from inflation.
Re:America's 1% Has Taken $50T From the Bottom 90%
by aidenn0 on Friday February 12, 2021 @12:37PM
(#26116220)
Lobby for the government to use use as an injection point?
Re:America's 1% Has Taken $50T From the Bottom 90%
by cryptocrypter on Friday February 12, 2021 @05:45PM
(#26119431)
I would guess owning assets?
And by doing that, we have the Cantillon Effect [0].
> The Cantillon Effect refers to the change in relative prices resulting from a change in money supply. The change in relative prices occurs because the change in money supply has a specific injection point and therefore a specific flow path through the economy. *The first recipient of the new supply of money is in the convenient position of being able to spend extra dollars before prices have increased. But whoever is last in line receives his share of new dollars after prices have increased*. This is why when the Treasury’s deficit is monetized, inflation is referred to as a non-legislated tax. In these cases, the government has seized purchasing power (rather than physical bills) from its citizens without congressional approval.
[0] https://www.aier.org/article/cantillon-effects-and-money-neu...