Inflation influencers (1 Viewer)

[Lapaz]

I constantly hear about how the party in power in congress is blamed for inflation, but they have very little influence. The Federal Reserve has by far the biggest influence within the government. Most other factors are global. Tax cuts and less spending can help, but the Fed and global supply chains far outweigh those.

To what extent can the US president control inflation? - Economics Help

The best guide to US elections is the state of the economy. If the economy is doing badly with high unemployment and/or higher inflation. The party of the sitting US president tends to get punished by the voters. But, how much influence does the President have on the economy and…

www.economicshelp.org

If the economy were actually poor, even the Fed would be hamstrung. It’s frustrating that so many people are going to vote based on inflation, because their representative will not be able to affect inflation.

 

[coldseat]

I constantly hear about how the party on power in congress is blamed for inflation, but they have very little influence. The Federal Reserve has by far the biggest influence within the government. Most other factors are global. Tax cuts and less spending can help, but the Fed and global supply chains far outweigh those.

To what extent can the US president control inflation? - Economics Help

The best guide to US elections is the state of the economy. If the economy is doing badly with high unemployment and/or higher inflation. The party of the sitting US president tends to get punished by the voters. But, how much influence does the President have on the economy and…

www.economicshelp.org

If the economy were actually poor, even the Fed would be hamstrung. It’s frustrating that so many people are going to vote based on inflation, because their representative will not be able to affect inflation.

I mean 75% of the people in this country believe we're in a recession. It's like none of them lived through the actual 2008 crash and recession. But facts like these are meaningless, it's all about narratives. And the narrative pushed on right wing media and reinforced by over coverage in the regular press is that the economy has tanked and Democrats are to blame for it. As such, there will be a majority of the people voting that way.

 

[J-DONK]

I mean 75% of the people in this country believe we're in a recession. It's like none of them lived through the actual 2008 crash and recession. But facts like these are meaningless, it's all about narratives. And the narrative pushed on right wing media and reinforced by over coverage in the regular press is that the economy has tanked and Democrats are to blame for it. As such, there will be a majority of the people voting that way.

We technically were in a recession, and we are now technically out of it.

I really don't like Powell and his decisions. I do think this should be his last term.

However, tt's Congress that's doing nothing.

What would stop most of this inflation?

Windfall Tax on corporate profiteering.

P.S. I'm so tired of seeing weird gas price post after the price has gone down. It's like Republicans are actual bots.

 

[superchuck500]

We technically were in a recession, and we are now technically out of it.

I really don't like Powell and his decisions. I do think this should be his last term.

However, tt's Congress that's doing nothing.

What would stop most of this inflation?

Windfall Tax on corporate profiteering.

P.S. I'm so tired of seeing weird gas price post after the price has gone down. It's like Republicans are actual bots.

Congress did pass the Inflation Reduction Act that is pretty widely agreed will have some impact on inflation. It’s true that corporate profits are a big part of it but I’m not sure how Congress could do much about that apart from some kind of new tax bracket - but there’s no way that would pass.

The true driver of the inflation problem is the $8T in liquidity that the US pumped in during the pandemic. Record Corporate profits during a high inflationary period are a problem but they’re not the source.

And of course the Republicans have managed to lay it all on Biden’s feet - which is pretty ridiculous, but that’s always how it seems to go.

 

[Bolo]

The people in charge will always get the blame. No different in politics. There were a lot of things that happened on Trumps watch that wasn't Trumps fault but he got the blame because the buck stopped with him. An example, he had 0 control over how states were gonna approach covid via state policy but everything that happened in the states got blamed on him. He couldn't make people take the vaccine, force people to social distance and when dumb people refused to do those things early on when there wasn't any quick treatment medical cocktails, they died and people blamed him for it.

Plenty of things have happened on Bidens watch, he's being blamed for them, his party is in charge, so his party is taking the blame as well.

The issue? Perception is reality and while reality might be totally different than the perception, its the perception where the battle lies. Nobody cares about what the truth is, it never matters in any election. Biden's election was literally a referendum on Trumps handle of covid, nothing else mattered and even when everybody screwed up, local, state, feds and the CDC in how it was handled, he took the blame, why? He was the man in charge.

 

[samiam5211]

People are voting in national elections based on factors that should be handled at the local school board level.

The system is broken.

 

[coldseat]

The people in charge will always get the blame. No different in politics. There were a lot of things that happened on Trumps watch that wasn't Trumps fault but he got the blame because the buck stopped with him. An example, he had 0 control over how states were gonna approach covid via state policy but everything that happened in the states got blamed on him. He couldn't make people take the vaccine, force people to social distance and when dumb people refused to do those things early on when there wasn't any quick treatment medical cocktails, they died and people blamed him for it.

Plenty of things have happened on Bidens watch, he's being blamed for them, his party is in charge, so his party is taking the blame as well.

The issue? Perception is reality and while reality might be totally different than the perception, its the perception where the battle lies. Nobody cares about what the truth is, it never matters in any election. Biden's election was literally a referendum on Trumps handle of covid, nothing else mattered and even when everybody screwed up, local, state, feds and the CDC in how it was handled, he took the blame, why? He was the man in charge.

Trumps handling and effect on Covid policy is different than Biden's handling and effect on the economy. Trump had a much more direct hand in our response to Covid and policy surrounding it. The failures of his administration where laid bare for all to see. Maybe some things got blamed on Trump that shouldn't have, but there was plenty of legitimate direct blame that was his fault.

Regardless, your point about perceptions and reality are true, but I'd also add in there media narratives. Media narratives drive most of our perceptions, especially in regards to the economy. And in both right wing press and the regular press, Biden is to blame for the economy. For Covid, only the regular press reported on Trump's incompetence. The right wing press reported on conspiracy theories, which is why we have such different perceptions as a country between the right and everybody else.

 

[MT15]

The people in charge will always get the blame. No different in politics. There were a lot of things that happened on Trumps watch that wasn't Trumps fault but he got the blame because the buck stopped with him. An example, he had 0 control over how states were gonna approach covid via state policy but everything that happened in the states got blamed on him. He couldn't make people take the vaccine, force people to social distance and when dumb people refused to do those things early on when there wasn't any quick treatment medical cocktails, they died and people blamed him for it.

Plenty of things have happened on Bidens watch, he's being blamed for them, his party is in charge, so his party is taking the blame as well.

The issue? Perception is reality and while reality might be totally different than the perception, its the perception where the battle lies. Nobody cares about what the truth is, it never matters in any election. Biden's election was literally a referendum on Trumps handle of covid, nothing else mattered and even when everybody screwed up, local, state, feds and the CDC in how it was handled, he took the blame, why? He was the man in charge.

So, Trump doesn’t deserve any criticism for deliberately choosing to lie about the pandemic? You can hear him admit how he lied about it in his own words to Bob Woodward. The only thing he cared about during the pandemic was if it would hurt his chances in the 2020 election. He covered up what medical professionals told him, he compromised the CDC to serve his political interests. He denied it was a serious issue, when he was told this was a 1918-style pandemic from the very beginning. He was the worst possible person to be president during this horrible event. Someone who thinks he knows better than the doctors and who doesn’t care about people dying if he thinks it would impact his re-election chances.

Your take seems a bit revisionist to me.

 

[UriUT]

Congress did pass the Inflation Reduction Act that is pretty widely agreed will have some impact on inflation. It’s true that corporate profits are a big part of it but I’m not sure how Congress could do much about that apart from some kind of new tax bracket - but there’s no way that would pass.

The true driver of the inflation problem is the $8T in liquidity that the US pumped in during the pandemic. Record Corporate profits during a high inflationary period are a problem but they’re not the source.

And of course the Republicans have managed to lay it all on Biden’s feet - which is pretty ridiculous, but that’s always how it seems to go.

If we assume a normal economy I would agree that government spending, particularly the direct cash to the population would spur inflation. However the pandemic also had the incredible effect of shrinking the private sector's GDP. Macroeconomically speaking, the government replaced the lost private spending due to the pandemic. Furthermore the money spent on R&D is more investment and placed in a few companies that its effect on inflation would suggest to be long term. Even the infrastructure act with its large price tag isn't inflationary as it is financed through bonds etc. Money isnt infused immediately. I've read And heard numerous economist state this about those spending bills. And we we see this by the marginal inflation numbers during this period.

Now the huge spike seems to coincide to the economy opening. We had numerous report that the supply chain adapted to the pandemic and would need time to revert back. For example the food sector changed their focus more towards home prep food during the pandemic. When the restaurants opened there would be drastic increased demand that a supply chain equipped for other means cant respond. Another example is the oil market. As you and mt pointed out, Trump intervened in the price war during a low demand period..ie people drive less. Consequently even the saudis took measures to reduce their production line anticipating a long low demand period. Shale oil weary of their bust previously didn't invest either due to their forecast of low oil prices (side note they don't seem to believe oil prices will remain high long term may explain why they are not investing and reaping tremendous short-term windfalls.). Again the economies opened and demand skyrocketed with low production, driving prices high.

We have a global inflation crisis. China at one point had shipping turnover increased by a month (sorry can't remember the exact number as it was long ago). This along with their zero covid policy slowed supply to an increasing worldwide demand.

Finally, the us is by far the most aggressive nation dealing with the pandemic economically. I may be wrong but I do not remember any other country give direct cash. This suggests that the inflation should 've been isolated to the US but the number suggests we actually have one of the lowest inflation rate of the developed countries.

So I agree that us spending had an effect on inflation (muted by a shrinking private sector) a disrupted supply side had a consequential effect. I would argue that the influx of money actually had a positive effect as it mitigated forces leading to a recession. One can also argue another tradition cause of inflation via wage increase and a tight jobs market can be the catalyst...but I cannot find an economist argue this. And the big elephant as you ve suggested is the increasing monopolies / oligarchies in our economy which reduces competition and reaping huge profits. It could also be due to price gauging as these corporations have zero incentives to reduce prices as demand is high with few consumers walking away from those high prices.

So yeah Biden isn't responsible and the feds aggressive actions seems to have peaked the inflation rate.

My non economist 1 cent take.

 

[UriUT]

Dow pops 1,200 points, S&P 500 jumps 5% in biggest rally in two years after light inflation report

October's CPI data came in lighter than expected, raising hopes of peaking inflation.

www.cnbc.com

Btw, we have positive news on the inflation rate. It's down to 7.7.

The consumer price index, a broad-based measure of goods and services costs, rose just 0.4% for the month and 7.7% from a year ago. That was its lowest annual increase since January. Economists were expecting increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, also less than expected.

Unfortunately, food prices are stubbornly high, and I wonder if the consolidation of the supermarket contributes to it. Energy is self evident because of the war in Ukraine and OPEC.

 

[brandon]

He couldn't make people take the vaccine, force people to social distance and when dumb people refused to do those things early on when there wasn't any quick treatment medical cocktails, they died and people blamed him for it.

Those "dumb people" were the people that hung on Trump's every word. If he had told them from the beginning to wear a mask and take the vaccine, they would have. The reason he gets the blame is because he very much did not do that until it was too late.

 

[B4YOU]

Dow pops 1,200 points, S&P 500 jumps 5% in biggest rally in two years after light inflation report

October's CPI data came in lighter than expected, raising hopes of peaking inflation.

www.cnbc.com

Btw, we have positive news on the inflation rate. It's down to 7.7.



Unfortunately, food prices are stubbornly high, and I wonder if the consolidation of the supermarket contributes to it. Energy is self evident because of the war in Ukraine and OPEC.

Private Equity Firms Tried to Shoplift a Supermarket Chain Before Selling It. A Judge Just Stopped Them.

The Albertsons/Kroger merger tells you a lot about our cash-extractive economy.

slate.com

It’s consolation and private equity piracy.

 

[samiam5211]

Trump's only redeeming quality was how well the "dumb people" obeyed his instructions.

He really could have single-handedly saved lives.

 

[UriUT]

I constantly hear about how the party in power in congress is blamed for inflation, but they have very little influence. The Federal Reserve has by far the biggest influence within the government. Most other factors are global. Tax cuts and less spending can help, but the Fed and global supply chains far outweigh those.

To what extent can the US president control inflation? - Economics Help

The best guide to US elections is the state of the economy. If the economy is doing badly with high unemployment and/or higher inflation. The party of the sitting US president tends to get punished by the voters. But, how much influence does the President have on the economy and…

www.economicshelp.org

If the economy were actually poor, even the Fed would be hamstrung. It’s frustrating that so many people are going to vote based on inflation, because their representative will not be able to affect inflation.

I'm still waiting for that big Republican plan to reduce inflation, which is down again. There were so much talk about it before the election.

 

[zztop]

I'm still waiting for that big Republican plan to reduce inflation, which is down again. There were so much talk about it before the election.

I'm still waiting for them to come up with a "better" healthcare plan vs ACA... the one they were touting back in like 2009 (and we still haven't seen yet)

 

[Taurus]

If we assume a normal economy I would agree that government spending, particularly the direct cash to the population would spur inflation. However the pandemic also had the incredible effect of shrinking the private sector's GDP. Macroeconomically speaking, the government replaced the lost private spending due to the pandemic. Furthermore the money spent on R&D is more investment and placed in a few companies that its effect on inflation would suggest to be long term. Even the infrastructure act with its large price tag isn't inflationary as it is financed through bonds etc. Money isnt infused immediately. I've read And heard numerous economist state this about those spending bills. And we we see this by the marginal inflation numbers during this period.

Now the huge spike seems to coincide to the economy opening. We had numerous report that the supply chain adapted to the pandemic and would need time to revert back. For example the food sector changed their focus more towards home prep food during the pandemic. When the restaurants opened there would be drastic increased demand that a supply chain equipped for other means cant respond. Another example is the oil market. As you and mt pointed out, Trump intervened in the price war during a low demand period..ie people drive less. Consequently even the saudis took measures to reduce their production line anticipating a long low demand period. Shale oil weary of their bust previously didn't invest either due to their forecast of low oil prices (side note they don't seem to believe oil prices will remain high long term may explain why they are not investing and reaping tremendous short-term windfalls.). Again the economies opened and demand skyrocketed with low production, driving prices high.

We have a global inflation crisis. China at one point had shipping turnover increased by a month (sorry can't remember the exact number as it was long ago). This along with their zero covid policy slowed supply to an increasing worldwide demand.

Finally, the us is by far the most aggressive nation dealing with the pandemic economically. I may be wrong but I do not remember any other country give direct cash. This suggests that the inflation should 've been isolated to the US but the number suggests we actually have one of the lowest inflation rate of the developed countries.

So I agree that us spending had an effect on inflation (muted by a shrinking private sector) a disrupted supply side had a consequential effect. I would argue that the influx of money actually had a positive effect as it mitigated forces leading to a recession. One can also argue another tradition cause of inflation via wage increase and a tight jobs market can be the catalyst...but I cannot find an economist argue this. And the big elephant as you ve suggested is the increasing monopolies / oligarchies in our economy which reduces competition and reaping huge profits. It could also be due to price gauging as these corporations have zero incentives to reduce prices as demand is high with few consumers walking away from those high prices.

So yeah Biden isn't responsible and the feds aggressive actions seems to have peaked the inflation rate.

My non economist 1 cent take.

Just about every nation gave cash to citizens.

During Covid, most governments just gave people money

The largest cash transfer scale-up ever mirrors global inequalities.

www.vox.com

 

[UriUT]

Just about every nation gave cash to citizens.

During Covid, most governments just gave people money

The largest cash transfer scale-up ever mirrors global inequalities.

www.vox.com

Thanks. I missed that.

 

[UriUT]

I'm still waiting for them to come up with a "better" healthcare plan vs ACA... the one they were touting back in like 2009 (and we still haven't seen yet)

They are busy with tax reforms. Replace the income tax with a sales tax??? They must really love the wealthy and hate the middle class and poor.