Re:Why inflation is not a threat
by deepnotderp on Sunday March 14, 2021 @08:24PM
(#26461110)
> “ Those "things" which have risen in price does not count as inflation. It has never counted as inflation.”
I’m sorry you’re homeless, but it technically doesn’t count as inflation!
if one is homeless, it's not really due to inflation, but due to their productivity not keeping up. Globalization has moved manual labour and low skilled labour away from the USA, and those people affected were not given help to re-skill into other work, and most have to move to providing low-skill services (like hospitality, casuals etc), which is notoriously low pay.
Blaming inflation (or how inflation is calculated) for a societal problem is a distraction.
Re:Why inflation is not a threat
by throw0101a on Wednesday March 17, 2021 @09:21PM
(#26498827)
Shelter is in the CPI.
Which is exactly what Keynesians were saying. The Monetarists said otherwise. Guess who was right?
> and in fact we’ve seen the prices of some things (real estate?) go up astronomically the past 13 years.
Those "things" which have risen in price does not count as inflation. It has never counted as inflation. There is a different word that should be used for that phenomenon:
* https://en.wikipedia.org/wiki/Economic_bubble
I do not understand why this is difficult to understand: inflation/CPI is the cost of goods and services that are used on a daily/weekly/monthly basis. Asset prices are not one of those things.
Please stop using "inflation" when it comes to asset prices, as it does not apply. It's like pointing to a Boeing 787 and saying "boat".
> In economics you’re right until suddenly you’re not.
In economics, at least "good" economics, there are models. These models describe reality: some models are better than others. We should follow the ones that make (more) accurate predictions.
Keynesian models (for example) had problems with stagflation in the early 1970s, but by 1978 most text books had explanation as to why the earlier models broke down, and why the phenomenon occurred in the first place:
* https://en.wikipedia.org/wiki/Stagflation#Neo-Keynesianism
Some folks' models said inflation would occur from money printing post-2008; others' models said it was not. One group was right, and the other was wrong.
Similarly: a bunch of folks are worried about inflation after the US Congress passed the $1.9T rescue plan, others are not. This is an(other) experiment in which some folks will be right, and others wrong.
Whose model best/better describes (economic) reality?
AFAICT, the Keynesians have been right more than any other school of though. I'm sure they may/will be wrong at some point, but hopefully something will be learned and models improved.