> Meanwhile they are sticking it to consumers

That's a lot to parse, but I'll give it a try.

"Record profits across the board for corporations" - Record profits is exactly what you would expect with lingering low interest rates + lowered rates from COVID response + unleashed demand post-COVID. This was by design, because profitable companies don't fire everyone and create a recesssion from unemployment. Or tank the stock market and thus housing market and thus create a recession.

And you're a quarter out of date. Profits and margins have been compressing in Q1 2022 and look to continue.

"Highest CEO pay ratios ever recorded" - Exactly what you'd expect with a roaring stock market, given equity-biased compensation. That will correct, as it always does.

And furthermore, talent compensation is already increasing and on every HR department's priority list. [0]

"Massive housing bubble" - Low interest rates + stimulus + lack of supply + sudden demand spike = price spike. Fed rate hikes will cool this off fairly quickly.

"The monied class..." - You mean, everyone?

"... making off with their spoils and cashing the stock market in..." - Reallocating and diversifying assets?

"Meanwhile they are sticking it to the consumers with inflation..." - Who is "they"? Some generalized bourgeoisie who control the means of production and arbitrarily set prices?

See earlier point (and google for statistics) and margin compression for what's actually happening: companies are passing along less than all of their own cost increases.

[0] https://www.pwc.com/us/en/library/pulse-survey/executive-vie... (I hate big-4 management consulting pablum, but it's a quick distillation)

> "The monied class..." - You mean, everyone?

Are you asserting that you believe the parent is using "The monied class..." to mean everyone? Which doesn't seem to be the case.

Or are you asserting everyone belongs in "The monied class", if so, that seems so overly broad as to be a bit ridiculous?

Are we talking about the hyper-wealthy? Business owners? Business managers? Investors in general? It's unclear.

There are a lot of complicated things going on and being generically angry at people with "more" money is uninformative and unproductive.

As near as I can tell, the parent's policy prescriptions amount to (1) we should allow asset bubbles to pop harder, (2) we should have created less(?) or more strictly controlled(method undefined?) COVID emergency debt, and (3) we should implement price controls for consumer goods(?).

[1] At $300 billion supposed net "worth", Elon Musk could retire ($3 million a pop) literally 100,000 times over. Or, he could retire, not making another cent, and live one hundred thousand times better than the average person. If his wealth only grew at par with inflation, he could literally spend $100k a year for three million years.

The fact that this much money is earmarked for this person, or any person really, is only possible because the enormous pyramid schemes they are able to set up which are paid into by speculative investors.

In my frank and honest opinion, there are NO words you can say, NO ideas you could have, NO labor that you could undertake, and NO buttons that you can push that morally justify the tax on humanity's subsequent activities that funnel that much wealth to you. Hands down. And with that money you have zero goddamn problems that justify you offering policy input that personally benefits you. We should shun such money addicts, not lionize them.

The power to make something happen. Like "Long range electric cars should be a thing, now" or "Reusable rockets should be a thing, now." Even and especially when most other people think it's impossible and disagree with you.

Or you can just build a gold-plated swimming pool and ensure your descendants never have to work.

Is that productive? Eh. Versus what? It certainly allows for more risk-taking than government, minimum-cost bidding projects would target. DARPA et al. aside.

It's certainly not fair.

But from a fairness of opportunity perspective, there are certainly more egregiously-born examples who have objectively produced less to show for it than Musk. Or than Ted Turner, to use another random positive example. (E.g. Barbara Hutton for a negative example)

Hacker News is a forum for entrepeneurs. The idea that successful entrepeneurship results in valuable companies shouldn't be foreign. Nor the knowledge that societies that confiscate the fruits of successful entrepeneurship, will soon not have any entrepeneurship at all.

Maybe the consequences of that in terms of individual wealth ownership are unpalatable to you, but the alternative would result in an option that is net significantly worse for society.

I don't accept this framing. That framing is what I thought 20 years ago. It's been the root of a major realignment of my thinking in realizing that these people more accurately have been successful at creating large organizations of people that instead do that fruit production, fight to keep themselves on top of that organization and channel the majority of the profits of those organizations to themselves. How else could you explain the massive, some would call obscene increase of CEO pay ratios over the past four decades? Are CEOs 10x or 100x more productive or good at making decisions than four decades ago? Do they do 10x or 100x more work? It's completely implausible. CEOs continue to be compensated insanely well, even when they make bad decisions and their companies go under.

The real answer is such titans have been more successful at changing the culture to make it acceptable to channel a larger and larger portion of their organization's profit to themselves. It's all mathematically impossible that these people could have done anything to produce so much more "entreprenurial" fruits themselves. Rather, they are the ones confiscating those fruits from their employees and their companies and are benefiting from the casino-like nature of speculative investment markets fueled ultimately by money created out of thin air by debt.

And on top of that, they tell us that they are being stolen from! Gaslighting horseshit.

The alternative? Surely there are more than two ways of organizing society: (i) one with successful entrepreneurship but large wealth inequality, and (ii) presumably one without successful entrepreneurship along with various other characteristics that make that society clearly "net" worse than it would be in (i).

For example, I could imagine a tax regime which resulted in a cap on individual wealth at, say, 1% of GDP. Or 5%. Or 0.1%. Or ...

It's not clear to me that there's an unambiguous demarcation between only two types of societies, and one which is observed across all possible policy or economic schemes.

10% of households own 90% of the stocks held by households. Close to half hold none at all.

Things will cost more. That’s hardly surprising. Energy is really important.

You can't just assume the price spike in December is the same thing that we're seeing in March or June.

The CPI data took years to catch up because consumers are quite price sensitive and detecting and responding to increased demand is a delicate process.

Of course prices went up.

Plus at best there was a big slowdown, but there was no serious shutdown, many people still worked and got COVID, eg. people who would have otherwise worked at the port. (Though even a serious lockdown doesn't help much. (We saw this in China.)) And mask wearing was so far from ideal that it was not able to seriously decrease the transmission of the disease.

Aaand of course the boosters could have been much much better (containing new variants): https://www.slowboring.com/p/were-getting-an-omicron-optimiz...

What's true is the shut/lock/slow part made no sense after we got the vaccines, and it's also quite obvious that there was just not enough stockpile of basically anything to do a ~1 month lockdown to stop the spread of the disease. (And the moment the first international plane landed it would have started again.)

The way you worded that somehow makes me think you aren't talking about the OPEC+ deal from 2020 that drastically reduced oil supply. Because strangely, not a coincidence, domestic production has been up since that deal expired.

I don't disagree that oil prices drive inflation since almost everything needs transportation, especially in the US where even domestic goods have to travel huge distances. But a "war on domestic production" is not evidence based.

Closest thing that could be serious considered a war was OPEC+, which I understand why Trump did it, prices were plummeting and we wouldn't want the entire sector to crash.

When looking at TIPS and inflation expectations it looks like it's not quite self reinforcing yet.

This is what people seem to forget. Trade involves two items, so you gotta look at both sides of the trade (in this case credit+dollars vs goods). Dollar supply has increased dramatically since 2020, credit near free, while the supply of goods has decreased. Obviously that's a recipe for inflation.

Had dollars+credit decreased with the supply of goods instead, people selling goods would have trouble demanding more dollars. For hyperbole, if only 1 dollar existed, no one could sell something for more than 1 dollar, no matter the supply of goods. People might still try to demand more than 1 dollar for their goods, but trade with dollars would cease to happen until they reduced their demands to <= 1 dollar.

> This is what people seem to forget. Trade involves two items, so you gotta look at both sides of the trade (in this case credit+dollars vs goods). Dollar supply has increased dramatically since 2020, credit near free, while the supply of goods has decreased. Obviously that's a recipe for inflation.

I don't think anyone forgets this. The standard model says supply constrained + generous fiscal/monetary policy = inflation.

The parent post mentioned "money printing coming home to roost. Lots of folks say that isn’t what it is." I too seem to have encountered people saying the money printing is a non-factor, and it's just supply chain problems. In reality, both are factors.

There is this from Dalio who suggests money printer go brrr policies sank the Dutch and Brits: https://youtu.be/xguam0TKMw8

While all the fancy math is great for drawing geometric shapes, human intuition and basic arithmetic run the economy; human intuition for quantity has been evolving for millions of years whereas our fancy languages are only 5,000 years old (so says historians). We annotate our arithmetic operators differently for calculus and the rest of higher level math, but at the end of the day with only 13% of the adult public possessing an “advanced degree” most people make pretty basic arithmetical decisions.

Smart people used their education to get ahead but the rest of the world has caught up and caught on as <50% believe in higher powers now; elites are just people, not specials to be kowtowed by.

So what’s happened is again elites tried to form concrete agency habits into the masses (like religion did) but the masses agency does not concretely conform to rigid mathematical objects and the elites are now out of touch; either by stubbornness or age, they can’t handle they’re the ones losing ground all this time.

So they tinker with official math to keep us in line: https://www.nytimes.com/1997/02/27/business/job-insecurity-o...

So in the end economic policy was always politically motivated power consolidation for the elites, and the public, probably thanks to the meta awareness of our communities the internet provides, has caught onto the big picture game. Like Assange said; only the highly numerate will be able to see. I like to think it’s because such minds are not as swayed by cable group think.

So here we are saving like the Fed said and emotionally normalizing to a recession coming because that’s what we talk about, and so we’ll create a self fulfilling prophecy of it because like the number say, only 13% have an advanced degree; the masses will go along with Jerome Powell and the cable news channels telling them; stop spending, save, because a recession is coming. And stopping that simple arithmetic spending at scale will trigger a recession.

Subs will get cut to services. Services die off. What’s left is the new “real economy”, and off we go again. Conveniently not giving a toss about general public who got hurt while the elites look smart for getting us to believe they saw the future, and ignore that listening to them really just modified our economics behavior to make it all true.

What can the average _not_a_billionaire_ investor do to weather this out (not knowing exactly what _this_ is)?

In my example I have most of my money on Index funds (with a 60/20/20 split between US markets, China markets, and sector specific ETFs) plus an emergency fund that lasts me about 12 months and I (unfortunately now) earn in Euros.

[1] - https://www.blackrock.com/us/individual/literature/investor-... [2] - https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

My conclusion is that long term it's probably good to be in stocks. The problem is that stocks might go down a lot before recovering, years from now. And of course you cannot time it.

They're already pulling back this year though:

https://finance.yahoo.com/quote/DJP

I've been using AVLV and AVUV, but they've been down since I bought them in May.

In short, a lot of what’s happening comes back to the debate we had during the early part of the pandemic... one side said shutting down the world would have major consequences down the line and we’re seeing that now.

No one seemed to understand that those kinds of things were going to have much more drastic effects for everyday people as well. This same thing goes for the stock market, sure I don't have a ton of money it it, but I do keep putting money in my 401k and so do a lot of other people that are depending on it for their retirement, when the stock market takes hits it effects me just as much as the "elite".

It would have been irresponsible to risk chicken with something that might have had MERS lethality.

Eventually we put tighter bounds on those quantities, and could make more informed decisions. But yes, all stages of the pandemic were unfortunately people talking past each other, without being actually curious about the pros/cons of various approaches.

But it's been awhile since the political class has had to deal with an actual existential science problem... so that muscle wasn't very strong.

Not all countries are experiencing high inflation at the moment.

Vast majority.

Which suggests that persistently high inflation is caused by the same thing it's always caused: (local) money printing.

Not some abstract worries about excessive (?) debt or 'fraudsters' etc or so.

And I think it's a great example that most of the actual drivers of economic outcomes are unmeasurable. What we actually measure and react to are themselves second order effects of those primary drivers.

Which is why we can compare two situations with similar (second order) metrics (but different primary drivers) and be puzzled by different macro outcomes.

However, nominal variables are also subject to feedback loops.

If they printed enough money, they could generate all the inflation they wanted (or live in economic utopia.)

Basically, keep using newly printed money to buy up assets around the world. At some point you either own the globe, or you'll get the inflation you wanted.

With boomers retiring and deaths and disability due to covid taking workers out of the pool, along with suppression of immigration, there's a large overhang of jobs compared to workers. This is giving average workers negotiating power which is creating wage growth.

That is what the Fed and the business pages are really most concerned about and the sternest warnings from the Fed are about the labor market. Not the headline CPI numbers.

The fact that the "man on the street" now believes that inflation is purely a monetary phenomenon, though, means that every time wage inflation rears its head that people will clamor for the Fed to punish the economy.

The Fed is going to have to crash the economy to create a recession and thereby cause deflation. There will almost certainly be detonations elsewhere in the economy (commercial and residential real estate most likely) that will further cause deflation. High CPI will be transitory because this Fed doesn't care about tanking the economy. Billionaires also don't care about tanking the economy, the past 20 years have taught them they always wind up even more on top than before.

What will be interesting though is to see what happens when they've had enough of pain and start to support the economy again, then inflation will probably come roaring back, since its causes are now the structural conditions of the wage market. Then there will be renewed calls to tank the economy again and people will object to the Fed doing anything to try to support the economy with exactly the same rhetoric here. In the near term future (~10 years) any time the inflation numbers tick up the stock market may crash on its own now.

I suspect we're now in for a decade or more of stagnation, although alternating periods of inflation and recession should average out. I might be wrong though if the billionaires decide it is too painful and want the Fed to turn the money spigot back on. But as a lot of this comment section shows, the managerial class has now been taught to really deeply hate the Fed doing that, and believes it to be the root cause of all that is ill.

But enter covid money printing actually reaching normal people (even if alot of it got soaked up too), plus the elites using the money to buy things normal people want instead of rich people nonsense (buying housing as "safe" investment during covid), plus all the money that was going towards servicing student loans getting spend in the economy, plus normal people using their power to get more wages due to worker shortages and here we are.

Yes. I think we had something like monetary inflation but it was all captured by the upper 1% and 0.1%. The policies suppressed wages down the Ginni Coefficient ladder and actually contained inflation. This produced low interest rates due to low CPI inflation expectations. But it would up producing what economists call asset bubbles rather than inflation. This has also built up over the past 30-40 years ever since Volker in 1980, it goes way beyond the post-2008 recovery and the pandemic.

We're now seeing the point where this has all become unsustainable, and the masses are clamoring (rightly) to get a share of it. Either we're going to allow that inflation to run downhill now and re-price via inflating wages and suck up the smaller pain of inflation, or I think we're going to have to inflict truly severe economic pain of multiple deep recessions. Given how much people now deeply hate inflation, now that wage inflation has reached the baristas and food service people, it looks like we're going to choose recession.

I would at least expect that to be less inflationary than that same amount of money ending up in consumers’ hands and being rapidly spent without an offsetting increase in production.

When the government opens up the feeding trough, it should expect pigs to show up. I agree that it probably can’t be blocked up front, but fraud needs to be prosecuted aggressively after the fact.

Yes, the brokerage accounts of rich people have less velocity than the bank accounts of poor people. This makes it more scandalous, not less. People who didn't need the money took ten times as much, because they could, and now they are pointing accusing fingers at the little people. Again.