A cure worse than the disease - Page 6 - Politics Forum.org | PoFo

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#15239116
ckaihatsu wrote:I do *not* support NATO expansionism. The *result* of NATO encroachment is Russia's right to self-defense, even pre-emptively.

Pre-emptive "self-defense"? :lol:
Try to stay focused here, because every *centimeter* that you give to greenlighting attacks on Russia (geopolitics), is a *mile* that you give to NATO expansionism eastward.

So what if NATO expands eastward? There was no credible threat to Russia from Ukraine or NATO.

I find it amusing that the anti-American soi-disant left has so easily transferred its loyalty from a socialist kleptocracy to a capitalist one.
#15239119
Truth To Power wrote:
Pre-emptive "self-defense"? :lol:

So what if NATO expands eastward? There was no credible threat to Russia from Ukraine or NATO.

I find it amusing that the anti-American soi-disant left has so easily transferred its loyalty from a socialist kleptocracy to a capitalist one.



Not anti-American.

This is all *geopolitics* -- I have no *nationalist* interests anywhere. Not a nationalist.
#15239361
late wrote:The head of the Atlanta Fed floated a 100 basis point increase (1%) as a possibility. 75 basis points has also been mentioned.

The problem, as I see it, is that there are signs the economy is cooling already.

Then maybe you would prefer more inflation?

I don't think you understand how it works. If the Fed "raises" interest rates, what it actually means is they are going to stop lowering interest rates. Lowering interest rates costs them lots of money. Guess where they get that money? They print it. (That's the simple explanation)

Why are you in favor of the Fed wasting more money?

The cure is worse than the disease, and that "cure" is continuing to hold down interest rates, in the face of this rising inflation.
#15239386
Puffer Fish wrote:
Then maybe you would prefer more inflation?



What I have argued for repeatedly is caution. The Fed can easily make things worse, so what I've been saying is interest rate hikes in the 25-50 BP range.
#15239463
Puffer Fish wrote:Then maybe you would prefer more inflation?

I don't think you understand how it works. If the Fed "raises" interest rates, what it actually means is they are going to stop lowering interest rates. Lowering interest rates costs them lots of money. Guess where they get that money? They print it. (That's the simple explanation)

Why are you in favor of the Fed wasting more money?

The cure is worse than the disease, and that "cure" is continuing to hold down interest rates, in the face of this rising inflation.


The only people who want more inflation are the people who are making more money as a result. That would be the owners of corps that have market pricing power and are using it to increase the price of what their corp produces more than is called for by their corps increased costs.

The Fed raising interest rates doesn't effect any cause of the current inflation. It is a cost for some corps, though, which those corps will pass on as higher prices.

The Fed's plan will not work until it has caused such a recession that the is 10% unemployment. This is a vast inefficiency, that MS econ. theory doesn't see as inefficiency.

The Fed's action will not help, and will hurt the US.
.
#15240229
late wrote:What I have argued for repeatedly is caution. The Fed can easily make things worse, so what I've been saying is interest rate hikes in the 25-50 BP range.

If we wanted more caution, maybe they should be more careful about how much of a budget deficit they are running.

It simply is inconsistent for government to be more concerned about interest rates, but not budget deficits further up the pipeline.

Budget deficits are the reason in the first place they have to worry about interest rates.
#15240235
Steve_American wrote:
The only people who want more inflation are the people who are making more money as a result. That would be the owners of corps that have market pricing power and are using it to increase the price of what their corp produces more than is called for by their corps increased costs.

The Fed raising interest rates doesn't effect any cause of the current inflation. It is a cost for some corps, though, which those corps will pass on as higher prices.

The Fed's plan will not work until it has caused such a recession that the is 10% unemployment. This is a vast inefficiency, that MS econ. theory doesn't see as inefficiency.

The Fed's action will not help, and will hurt the US.
.



Puffer Fish wrote:
If we wanted more caution, maybe they should be more careful about how much of a budget deficit they are running.

It simply is inconsistent for government to be more concerned about interest rates, but not budget deficits further up the pipeline.

Budget deficits are the reason in the first place they have to worry about interest rates.



Infighting.

You're welcome to do it, of course, but I have to point out that *all* approaches so far are *reformist*, and *supply-side*, or 'trickle-down' -- as bad as anything from Reagan, it could be argued.

'Supply-side' implies that one thinks the system is *fixable* -- it isn't.
#15240308
Puffer Fish wrote:
If we wanted more caution, maybe they should be more careful about how much of a budget deficit they are running.



Build a time machine, go back, and make sure Reagan doesn't become president.
#15240411
Puffer Fish wrote:If we wanted more caution, maybe they should be more careful about how much of a budget deficit they are running.

It simply is inconsistent for government to be more concerned about interest rates, but not budget deficits further up the pipeline.

Budget deficits are the reason in the first place they have to worry about interest rates.


I explained why the Fed raising interest rates will not work unless the resulting recession causes 10% unemployment. You have not responded.

If I'm right, then the Fed is actually powerless to contain the current inflation because of what is causing the inflation.

It is just like 200 years ago when there was a crop failure and as a result the cost of energy (now oil, then food) increases. The price of food increases not because there is more money in the economy, but rather because the "market" is doing its job in a capitalist system of making sure that the richer people get the food and the poorer people are the ones who don't get to eat.
. . . If 200 years ago the Gov. had acted to somehow take money from everyone (a little money is all that is needed to be comparable to the Fed raising interest rates now), this action would have had zero effect on the increasing prices. The price is set to make sure that the richer people get the food. Taking money from every person doesn't increase the food supply. Nor does the money supply effect what price is necessary to price out enough people of the market.

Again, today, the inflation is being caused mostly by corps with market pricing power just choosing to make more profits by seeing a disaster to be an opportunity to make more profit. Also, by the supply being cut by covid shutting factories in China, etc. and shipping assets being slowed, also by covid. And OPEC cutting production from what it could pump. And also, now, by the war in Ukraine.

It would be far more useful for Congress to impose a 100% tax on the excess profits of the corps with monopoly pricing power. But, they own Congress, so this is impossible. So, I have suggested that the Gov just give more "stimulus" money to the people. Which can be used to increase imports of food and oil.

Puffer Fish, the problem with your thinking is that it is based on MS econ. theories. The specific assumption that you are making without being aware of it, is that the economy has many corps in very sector competing with each other, and this keeps any from using monopoly pricing power. But, this assumption is not true today. Now, many sectors have just a few corps in them, and so they do have monopoly procing power. See Amazon.

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