Say it with me. The Epstein Economy.
I think people might not like the 2 percent inflation target that is literally meant to make people poorer (the ecb spells it out on the website as downward pressure on wages), and would prefer an actually stable currency. Shocker.
The ideal function of inflation is to allow the economy to slowly reorganize.
If a function gets less valuable, due to any number of circumstances, the ‘correct’ thing to do from a resource allocation standpoint is allocate fewer resources : I.e. fewer workers should do that thing. In the labor economy, demand is signalled by wages. Reducing wages lowers the pool of supply that can be tapped, and allows those workers to do other more valuable work.
It is a beautiful theory.
In practice, people hate when wages go down and it leads to all kinds of social problems. Planned inflation allows this process to occur while psychologically skirting the reduction in nominal wages. That’s the whole point.
There are further problems with the theory, such as people not really being fungible across available opportunities (due to the level of specialization required to be a worker in most fields) preventing the kind of labor mobility that would allow labor redistribution to function optimally. But the general premise makes sense when viewed entirely dispassionately.
The problem is, it obviously (collective bargaining etc. alone breaks the theory already) doesn’t work. Like any economic theory, it’s a theory that assumes too many things and ignore a great deal of other things. If a job stays more or less unchanged for a hundred years and there’s still demand for it, why exactly do you need constant pressure on those specific wages?
Also, you can have growing and shrinking wages without a national bank targeting an inflation rate. Having heard some FED people speak (powell etc.) makes it even more clear that there’s a bunch of out of touch assholes at the levers of this shit.
I largely agree, but there is a need for some mechanism to reallocate labor.
The problem arises when the relative value of things shifts. If you are doing X making $50K per year, but technological developments have made X less valuable (i.e. greater automation making it more efficient per-worker, or simple falling demand), then one of two things has to happen to maintain the correct labor allocation to X:
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The wage decreases in absolute terms, $50K becomes 40 or 30 or whatever the new equilibrium price-point is given the circumstances.
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All other wages and prices increase relative to the $50K such that the value of the wage given to the worker is the same as if 1 had occurred. This is the inflation case.
Any other outcome means there is an imbalance: a worker would be providing a service worth less than X and being rewarded a value of X. This would be a signal to add more workers doing X … the opposite of what is needed when X is becoming less valuable. There is no future - in a market economy - where a worker simply continues to earn what they did before in value terms. This would mean ignoring the demand signals in the market and ascribing a resource allocation by fiat - which if we are doing that we shouldn’t be discussing market dynamics in the first place.
Markets exist for price discovery and resource allocation. Labor is a resource and has a price, and like any other resource that price changes. This has many consequences, both good and bad, for the humans comprising the dispassionate word ‘labor’.
Also, like many other things priced by the market, there are distortions from the ideal case. Roles are valued higher or lower than they ‘should be’ based on social prestige, or perceived difficulty, or visible utility to those already affluent, or whether it is done in a field or an office.
People are well aware of all of all this, in a broad sense. There is always anxiety in modern life around stability and continuance of employment and pay (doubly so with all the AI talk).
These forces also affect firms - when they operate in areas that are becoming less valuable, inflation smoothes their transition out of the market … rather than simply collapsing and displacing all of their employees at once.
Laying people off just needs to be less of a bigger deal, instead of dropping wages 2% a year, they should just lay off the 2% least efficient workers each year. but that requires a stronger social safety net because people talk about layoffs like they’re sending people to their deaths, which is kinda true because without a steady income in this country youre reduced to surviving the elements.
I can see that, my point being that the 2 percent target is merely fighting symptoms and imo doing more harm than good.
And still, price discovery happens without a 2 percent target aswell.
My issue is, it’s been decades and society in general just accepts this kinds of economic policy. This is ridiculous, and i am attacking that.
BTW, i am not trying to pick a fight, i am just frustrated
The target is arbitrary, just the larger the steady inflation is the faster the reorganization occurs.
There are other possible systems - we built all of this and can decide to do something else entirely at any point… as long as the harvest is collected, the power plants are serviced, the pharmaceuticals are produced, etc. This is just what we’ve landed on the compromise where the masses don’t revolt, the elites don’t (completely) dominate, and all the necessary work still gets done.
I don’t know if non-inflationary policy would be better or worse - it would certainly be strange to expect negative raises each year - but it perhaps would be more honest.
I fully share your frustration, and thank you for the discussion!
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I seriously can’t believe that a 6 inch sub, drink and chips costs $18 at Subway. What the actual fuck is going on with inflation?
what the fuck happened to the 5 dollar footlong? was that just to get us in a van?
Inflation happen. Do you realize how old that marketing gimmick is?
roughly but also i eat better than subway. my body is a temple and i am very picky about the trash that goes into it.
The crazy thing is that tacos are more like 8 dollars.
2024 exit polls.
Problem is, Obama left Trump an incredible economy. People that don’t pay attention think Trump deserved credit for this.
Similarly, Biden was left a smoldering pile of ash from Trump. Inflation was real, and even if it could be blamed on covid, Biden was not a good messenger, so everybody just blamed him and Harris.
So maybe people saw this question and thought, do I prefer the economy of 2016-2020 or 2020-2024?
People are dumb. Another interesting one is “Who do you trust to handle crime?”. Somehow the felon wins that one too.
Trump was also heading into a recession pre covid
Covid took the blame for his shit policies and somehow he even still managed to fuck up the absolute softball that covid gave him to rally support. It was his 9/11 style major event. I was sure he’d win again while following it. Instead he completely blundered it thankfully… then somehow he won again with tiny doomed rallies stranding supporters in the middle of no where. I’ll never understand his supporters 😔
Im not entirely convinced there wasnt shit fuckery going on last election
Some evidence is trickling out that it was mucked up. Purged (heavily democratic) voter registrations, ignored mail ins, etc etc
True, economy recovered better than most after pandemic, as companies price gouged, people bought the propaganda and blamed Dems. And they will elect a maga majority again after a short Dem period, where they can’t fix it all quickly enough for them. Real progress can’t be made, and any good legislation gets blocked or repealed in a few years by maga, destruction is much faster than building good things, and the wealthy keep taking more.
Problem is, Obama left Trump an incredible economy
For the rich, sure. For everyone else, the cracks in the Neoliberal foundation laid by the likes of Reagan had already been starting to show.
That’s a big part of why a personally repulsive and obviously corrupt demagogue like Trump could ever be taken seriously as a candidate, let alone win twice.
Biden was left a smoldering pile of ash from Trump
This part is true, but he still did a piss poor job shepherding the kind of reforms that could have staunched the bleeding somewhat and prevented the return of the Mango Mussolini.
Biden was not a good messenger
Or good on policy. Nor did the lukewarm and frankly cowardly approach of him and his AG towards holding Trump and his cronies accountable for their multitude of crimes help.
Delaying/denying justice to “not seem to be politicizing the legal process” IS politicizing it.
People are dumb. Another interesting one is “Who do you trust to handle crime?”. Somehow the felon wins that one too.
Yeah, time and again, gaslighting media narratives beat the objectively experienced reality.
Truth is that the Dem leadership is awful and has been since the late 70s but ESPECIALLY since 1992, but the GOP has always been much worse in almost every aspect, ESPECIALLY the economy and their treatment of anyone they deem “the others”.
But the billionaire-owned media spins the grotesque demagoguery of reverse Robin Hood economics and draconian oppression of poor people and racial minorities (and especially combinations of both) through the “justice” system as “being responsible” and people eat it up because it’s the default narrative they’re used to being treated as fundamental truth even though it’s one of the worst lies ever told.
Not just dumb people, btw, the vast majority of ALL people. Propaganda is MUCH more effective than most of its victims are willing/able to recognize.
This part is true, but he still did a piss poor job shepherding the kind of reforms that could have staunched the bleeding somewhat and prevented the return of the Mango Mussolini.
Do not discount the fact that mitch and other repugnants outright said they will block every single measure Biden tries to put out just so they can not give him a meaningful win and make him look bad. They fucked over the American people for their own political gain.
“There just wasn’t any alternative candidates! I basically had to vote for him.”
But I disagreed with Harris on 1 out of 100 issues. How dare you expect me to vote for someone who doesn’t agree with me on every single topic!
And they were fine that he proudly grabbed women w/o consent and worse, that is a red line for anyone who has integrity and female loved ones.
Shiver me timbers,
Laughing lady had dark skin,
Vote rapist instead
I felt that way voting for her
At least you were smart enough to realize how bad Trump would be
And it ended up being so much worse than that with a lot of time left in his term. :(
But thanks
There was a stock market crash in 1987. Bush Sr. won in 1988.
Facts are for Liberals, not real men!
Obama caused the 2008 recession by getting voted in almost a year after it started.
That was the first time I’d ever heard of Ron Paul.
I was visiting my brother and his family. His mother-in-law was watching TV. Ol Ron Paul was on some news show or another talking about how the economy was about to crash.
My brother’s mother-in-law was a very unpleasant person and was loudly disagreeing with the TV. It made Ron Paul seem like a pretty reasonable guy.
Kind of a shame about his Nazi bar antics.
His son can’t even claim the plausible deniability of having a movement overtaken by Nazis.
Crazy, democrats think a democrat would handle the economy better, and republicans think a republican would handle the economy better.
I would have never guessed that.
You’re missing the part where 53% thought Trump was better but why would you read the chart?
Is that correct? Can I have a source?
Literally on the chart.
That just says 46% and 53%. I saw those numbers. I asked because I know it’s easy to mess this kind of thing up. There’s nothing that indicates what that colored breakdown actually is.
Also for stacked bar charts like this the bar is supposed to be proportionally sized. Shit chart all around.
They both add up to 100% of the republicans, democrats or independents who said Harris or Trump.
This is why America is fucked we can’t even read a simple chart.
I garauntee you that’s wrong. Independents are 33% not 3%. Can I have the source?
The “policy failure” of the tweet is conveniently vague enough for people to interpret it how they wish, but the 2 main drivers of inflation right now are:
- The Republican tariffs
- The Republican war on Iran
Nah this is 100% Hillary’s fault.
Its all her buttery males. Driving up the dairy cost
Idk who that Ben Ghazi feller was but I bet he has something to do with it too.
Was he a buttery male?
So very buttery
Alien historians picking over the bones of our species will be very confused by this prolonged controversy of a female politician named Hillary Clinton and her greased-up concubines(?)
She was so close. Her hands are too weak though
And the share price still stinks 🤷
Not really. It doesn’t matter what arbitrary number those things cost, it matters if people have that arbitrary number to buy those things and if that arbitrary number is relatively stable and strong.
why are we so dependent on business for sustenance. is it that difficult to make a taco, man. you put ground beef or substitute in a pan and then sprinkle a seasoning packet over it mixed with some water.
pound of ground beef on sale - 5 bucks
seasoning packet - 50 cents
bag of shredded lettuce - 2.50
bag of shredded cheese - 2 bucks
taco sauce - 2 bucks
sour cream - 2 bucks
for $14 you can make 15-20 taco supremes.
edit: forgot the shells, which you can buy at aldi for a little over ONE DOLLAR!!!
People don’t depend on restaurant businesses for sustenance, thats what they depend on grocery/farming businesses for as you already show. People buy time, energy, and enjoyable experiences from restaurant businesses.
If I have a craving for tacos, this craving has to hit me at a convenient enough time for me to plan a recipe and shopping list (15min for my brain), go to the grocery store (30 min), put things away and clean limited kitchen space cause I’m always behind on chores (10 min), chop prep pico de Gallo spice and saute beef toast shells assemble garnish (60 min cause my efficiency sucks), clean up and pack leftover (20 min). That’s over 2 hours after a work day when I just wanted to turn off my brain and eat tacos, so now I’m even more exhausted. And I actually like cooking.
It used to be you could spend ~0.5x more for cheap takeout to save yourself the time, energy, and mental effort of doing it yourself. Now it costs 2-3x more. That cost increase is part of what people are pissed about.
They never said that was the cheapest way they could eat. They’re pointing out how expensive EVERYTHING is now. You used to be able to eat out without breaking the bank if you wanted. Now it’s a luxury. Restaurants are a great way to add variety to your life, experience other cultures, and be social. We lose a lot when people can’t afford to eat at them, and then they end up going out of business.
make a taco… ground beef… shredded lettuce… bag of shredded cheese… sour cream…
SMH
i miss the days when eating out was awesome but those days are gone. eating out is either too expensive or the quality is so shit it’s not worth the price.
there are 3403483048 chefs on youtube trying to teach you how to cook for FREE. it’s not hard and doesn’t take a lot of time.
one of the most liberating things in this country is being able to make a good sandwich or a good pasta dish or whatever.
stop paying grubhub $40 for shit you can make in 10 minutes for a few bucks.
Guys, even when things are getting worse, when you lie about the prices to exaggerate, people are just trying to look at you funny.
People ARE spending these prices and higher on those items and they arent edge cases or luxury high end versions. Just because you CAN find cheaper doesnt make this post untrue
So cars start at 70k because luxury cars exist?
Those numbers aren’t really exaggerated. I’ve seen 5 dollar tacos at Taco Bell, albeit it’s was the Doritos taco supreme. Same with Subway, get premium toppings in foot long you could approach $20, definitely hit that price with large sandwiches at more premium establishments.
On the latte front, the Starbucks CEO legit said a $9 dollar coffee is “affordable”.
https://finance.yahoo.com/economy/articles/trouble-brewing-starbucks-ceo-calls-212648034.html
Affordable premium experience. That’s CEO for we dropped poor people. So no, that’s not what he said, at all. You should really be more precise and careful how you read. The 20oz lattes are $5.50 until you start adding 40 pumps.
I just checked in my Starbucks app because I know youre wrong, a regular unmodified grande pumpkin spice latte is 6$ a venti is $7.50.
$7.0 on Wall St
5.80 in philly
5.75 in grand Park LA
6.10 in Chicago.
Oh right, you can find their biggest meals or a 20 oz triple pumped “latte” and add shit to create edge cases. The Internet warrior mo.
A basic taco is $2.50 . $1.75 if you get one without a protein.
Where do you live? The prices in this post aren’t high enough from what I’ve seen.
Close enough to NYC to know these ain’t average at all and, at best, are trying to be cherry picked examples, probably from a highway if based on any facts at all.
