Friday, May 26, 2023

Dismissing Anything From The Left

Crazy lefties suggested the inflation was transitory due to "turning the economy back on again" bottlenecks and then that firms were using their market power to maintain higher prices ("greedflation"). Maybe not the full story, but certainly part of it, and if so then Fed interventions were likely to make things worse (reduce potential output) by having greater and quicker supply-side (lower investment) impacts than demand-side and therefore fail to lower inflation.

If so, the best policy responses would actually be things like price caps (complicated in practice, but not crazy in theory!).
Widely mocked by the various serious people.

It might have been wrong, but no, that wasn't enough.  Conspiracy theory! Loony lefties!

Fast forward and greedflation is not only real, but Good, Akshually! The point of this linked piece is, basically, sure interest rate hikes are hurting wages, but corporate profits are going up so we've avoided a recession! Or, more to the point:: the interest rate hikes transferred money from workers to profits. Insane lefty stuff, except for the "it's good" part.

This is all basic Econ 101, as is all economic policy discussion. It isn't what you find in your advanced Marxism class at UMass Amherst, or whatever they imagine.

Centrist dipshists really don't sound any different than Larry Kudlow, most days.

Okay it's week 5 of Econ 101, not week 2, so it's a bit more advanced than most economic policy discussion, but still.