Why can’t conservatives just admit they were wrong about inflation?

[fskimospy]

You have made the wrong assumption, and thus you are asking the wrong questions.

You assume that conservatives thought that inflation was going to be rampant (because, well, they said those words). Instead, the real thought was "we can't do anything that boosts the economy when Obama is in office since that would make Obama look good". That is why we couldn't pass a jobs bill, couldn't pass an infrastructure bill, needed to audit the fed, couldn't have low interest rates since we temporarily worry about inflation, etc. Once you realize that they aren't worried about inflation, but are instead worried about Obama looking good, then you see why they can't admit to being wrong about inflation. They were never actually worried about inflation to begin with.

This is a good and interesting point! We know that conservatives don't care about budget deficits as they happily run them up when in control of government. Deficit worries are simply a useful tool with which to attack social welfare spending they don't like. Considering that deficits affect inflation rates it does stand to reason that they don't care much about inflation either, simply finding it a useful tool to inhibit economic growth when unfriendly politicians are in power.

A few things could argue against that though. One is that inflation decreases the real value of debts, and debts are overwhelmingly held by rich people. Also somewhat related (and conveniently argued with) is that low interest rates reduce the spread banks can make on loans, reducing their profitability. As banks and rich people seem to be two constituencies that the GOP genuinely does care about I could see how they care about inflation. Not for the reasons they claim, but because it helps rich people.

 

[Starbuck1975]

SpaceX is "exceptional" in disrupting aerospace and automotive. Uber is "exceptional" in disrupting transportation. Airbnb is "exceptional" in disrupting lodging. Amazon (not SV, but same culture) is "exceptional" in disrupting commerce. Google and Facebook are "exceptional" in disrupting advertising. At some point, you start noticing a rule to these "exceptions." Technology players are is disrupting established players and industries. If you think AI is a bubble, OK, fine, temper your expectations. But don't be surprised if your industry becomes the next "exception."

SpaceX is disupting payload delivery, but not all of aerospace.

Uber disrupted transportation yet the taxi industry remains and will adapt and survive.

Telsa is making tech cars for techies, but continue to struggle with building to economies of scale.

Airbnb expanded lodging options yet hotels are still going up, and their business model is facing push back from communities that do not want rental units in areas zoned for residential.

Amazon is disrupting commerce, but stumbled with Whole Foods and Wallmart is adapting. Amazon is in trouble should Trump increase postal rates.

Google and Facebook were disruptive, but digital advertising has its limitations, and their platforms are already reaching obsolescence now that the novelty has worn off.

Typical Silicon valley elitism. It's "disruptive" so it must be important.

No industry is an exception, mine included, but what I am starting to learn is that people with intimate knowledge of how industries work are in a better position to disrupt than those in the Silicon Valley bubble.

 

[JSt0rm]

SpaceX is disupting payload delivery, but not all of aerospace.

Uber disrupted transportation yet the taxi industry remains and will adapt and survive.

Telsa is making tech cars for techies, but continue to struggle with building to economies of scale.

Airbnb expanded lodging options yet hotels are still going up, and their business model is facing push back from communities that do not want rental units in areas zoned for residential.

Amazon is disrupting commerce, but stumbled with Whole Foods and Wallmart is adapting. Amazon is in trouble should Trump increase postal rates.

Google and Facebook were disruptive, but digital advertising has its limitations, and their platforms are already reaching obsolescence now that the novelty has worn off.

Typical Silicon valley elitism. It's "disruptive" so it must be important.

No industry is an exception, mine included, but what I am starting to learn is that people with intimate knowledge of how industries work are in a better position to disrupt than those in the Silicon Valley bubble.

pass that around bro

 

[senseamp]

No industry is an exception, mine included, but what I am starting to learn is that people with intimate knowledge of how industries work are in a better position to disrupt than those in the Silicon Valley bubble.

You are learning wrong then. Open your eyes and notice what's actually happening. Walmart just canned 500 people in headquarters, despite Trump tax cuts. Amazon is eating their lunch.

 

[Thump553]

The notion that inflation is a threat during massive unemployment, low demand & falling asset prices is simply absurd. I'll bet he's all for tax cuts & trickle down, too.

Except for falling asset prices (we had rising prices) that is exactly what we had in every economic downturn in the seventies and eighties. Imagine-you can't find a job but your rent, gas, utility and food bills go up every month. That's what we called then by the lovely name of stagflation.

 

[Jhhnn]

Except for falling asset prices (we had rising prices) that is exactly what we had in every economic downturn in the seventies and eighties. Imagine-you can't find a job but your rent, gas, utility and food bills go up every month. That's what we called then by the lovely name of stagflation.

Asset prices, particularly real estate, went to hell in a hand basket when the crisis hit-

https://en.wikipedia.org/wiki/Case–Shiller_index#/media/File:Case_shiller_janv09.jpg

 

[Exterous]

What history reveals is that the FRB didn't have the power to control the housing bubble. When they figured out what was happening they did the right thing & became the lender of last resort to overextended cash strapped banks whose collateral looked like bunk to their former investors. They even extended that from commercial banks, their traditional sphere, to investment banks because of the severity of the situation. They helped keep the markets alive.

None of that is really germane to the discussion on whether inflation was a concern or not

Inflation ceased to be a valid concern when the crisis hit, when they were staring into the abyss of a 1931 scenario. It sure as Hell wasn't a valid concern in 2010, either, no matter what Goodfriend was being paid to say at the time.

Quotes from Ben Bernake's The Courage to Act - all of which occur after Bear Sterns failed
(This was just a quick skim covering a tiny portion of his book. Inflation concerns are that easy to find)

We had to avoid other potential risks, from higher inflation to increased moral hazard p409

Inflation, an important concern when the Committee had met p418

They (The hawks) worried that this easy policy would eventually have bad side effects - if not higher inflation then perhaps the return to excessive risk taking.
...
In the interest of good planning I thought it made sense for the FOMC to discuss and agree on the mechanics of normalizing policy (to tighten policy\to combat inflation -late 2009) p470

We would cut the purchases short if we were dissatisfied with the results of if we saw signs of building inflation pressures (October 2010) p489

So we have Jhhnn saying inflation wasn't a concern after the crisis hit and we have Ben Bernanke saying it was - even into 2010. One of those has slightly more weight than the other

 

[Jhhnn]

None of that is really germane to the discussion on whether inflation was a concern or not



Quotes from Ben Bernake's The Courage to Act - all of which occur after Bear Sterns failed
(This was just a quick skim covering a tiny portion of his book. Inflation concerns are that easy to find)









So we have Jhhnn saying inflation wasn't a concern after the crisis hit and we have Ben Bernanke saying it was - even into 2010. One of those has slightly more weight than the other

Yes, Bernanke acknowledges that the inflationista twits like Goodfriend were humored at the time as the FRB engaged in what would have been very inflationary policy under different circumstances. Their "concerns" were based on free market ideology rather than reality. That's my point. It's unlikely that Goodfriend has shed the shackles of that ideology, either, meaning he'll probably want to do exactly the wrong thing the next time that GOP policy flames out the economy.

Free Market True Believers see the boom & bust of unrestrained Capitalism as the natural order of things, the way it's supposed to work. The little people don't matter in their grand vision of today any more than they did in 1930. Here's one of their ideological gurus on the subject of a depressed economy way back then-

It's easy to take that attitude when you won't participate in the misery.

 

[Starbuck1975]

pass that around bro

Which part do you wish to refute

 

[Starbuck1975]

You are learning wrong then. Open your eyes and notice what's actually happening. Walmart just canned 500 people in headquarters, despite Trump tax cuts. Amazon is eating their lunch.

Citation needed. While Amazon is working to figure out the brick and mortar side of the equation, and miscalculated with Whole Foods, Walmart is gaining traction on e-commerce referral conversion, which is fairly significant considering that e-commerce is not their core competency. Both are trading blows but there's not been a knock out punch.

Silicon Valley, so predictably dogmatic.

 

[BigDH01]

Free Market True Believers see the boom & bust of unrestrained Capitalism as the natural order of things, the way it's supposed to work.

Any system made of people will be imperfect. We're in several bubbles right now and government spending is about 36% of GDP. What do you want? 50%? 100%? Tell me how much of the economy the govt needs to control before it solves human nature.

The little people don't matter in their grand vision of today any more than they did in 1930. Here's one of their ideological gurus on the subject of a depressed economy way back then-

Free market capitalism has lifted billions of your "little people" out of poverty in the last century alone.

It's easy to take that attitude when you won't participate in the misery.

You ever think of the misery caused by central planning? Authoritarian governments literally killed too many to count in the 20th century.

 

[nickqt]

Any system made of people will be imperfect. We're in several bubbles right now and government spending is about 36% of GDP. What do you want? 50%? 100%? Tell me how much of the economy the govt needs to control before it solves human nature.



Free market capitalism has lifted billions of your "little people" out of poverty in the last century alone.



You ever think of the misery caused by central planning? Authoritarian governments literally killed too many to count in the 20th century.

Free market capitalism? You mean Democratic Socialism?

Oh, and laugh out loud about the central planning. Name 3 libruuuuls who want central planning.

Protip: central planning means that the gub'mint plans the entire economy. No one wants the state of Alabama, or DC, to issue quotas for lipstick, purses or fine leather goods.

You can lob as much napalm at carefully-constructed strawmen as you like, just don't pretend that you're argument is relative to anything relevant to the actual conversation about economics.

This isn't Galt's Gulch, snowflake.

 

[BigDH01]

Free market capitalism? You mean Democratic Socialism?

No, I mean free market capitalism.

http://www.huffingtonpost.ca/michel-kellygagnon/free-markets-help-poverty_b_3721605.html
https://www.economist.com/news/lead...out-extreme-poverty-20-years-world-should-aim
https://www.dailywire.com/news/1452...alism-solves-poverty-aaron-bandler#exit-modal
https://mises.org/library/data-clear-free-markets-reduce-poverty
https://www.cato.org/publications/commentary/global-povertys-defeat-capitalisms-triumph
https://www.investors.com/politics/...s-global-poverty-and-hunger-are-on-the-ropes/
http://reason.com/archives/2014/10/08/poverty
http://www.valuesandcapitalism.com/people-across-world-prefer-free-markets/

I like this out of the last one:

It isn’t just a majority, either—it’s a majority of people in the poorest countries. The study found that “belief in the free market tends to be highest in developing countries (median of 71%).” Even more incredibly, “nearly two-thirds or more in all nine of the developing economies surveyed agree that most people benefit from capitalism, including 80% of Bangladeshis, 75% of Ghanaians and 74% of Kenyans.”

Oh, and laugh out loud about the central planning. Name 3 libruuuuls who want central planning.

Protip: central planning means that the gub'mint plans the entire economy. No one wants the state of Alabama, or DC, to issue quotas for lipstick, purses or fine leather goods.

https://mises.org/blog/what-central-planning

Mises describes this better than I could:

Central planning refers to planning as a means of social engineering. In other words, the central planner intervenes in the economy to manipulate the outcome. Why does the government fund healthcare? Because it is believed that if they do not then the market will inadequately supply health services. Why do Keynesians support fiscal stimulus? Because there is insufficient aggregate demand. These are all forms of interventionism, and as such they are also all forms of central planning. They represent the intent to manipulate an outcome away from what it would have otherwise been had it been left to “spontaneous order”.

Of course, interventionism is not the same thing as socialism — socialism is a very specific economic system, where the means of production are collectively owned. But, central planning is not the same thing as socialism; it is merely a facet of socialism. Planning boards can exist in a capitalist economy (government) and a socialist economy.

Is central banking a form of central planning? Absolutely. The role of central banks is to help avoid certain outcomes which are expected to produce themselves in a free market. This includes price stabilization, unemployment targeting, and the guarantee of financial stability. Central bankers look at the data and decide whether or not an intervention is necessary. By the very definition of their actions they are centrally planning.

Can you not think of 3 "libruuuuls" on here who are in favor of planning some resource distributions? Three people here prefer socialized medicine?

You can lob as much napalm at carefully-constructed strawmen as you like, just don't pretend that you're argument is relative to anything relevant to the actual conversation about economics.

This isn't Galt's Gulch, snowflake.

I'm guessing Galt's Gulch is the only thing you think you know about libertarianism. Personally, I don't know much about it as I've never read Atlas Shrugged as The Anthem was too preachy and I mostly read non-fiction. Sorry your brain can't be goaded into anything more than stereotyping.

 

[Jhhnn]

Any system made of people will be imperfect. We're in several bubbles right now and government spending is about 36% of GDP. What do you want? 50%? 100%? Tell me how much of the economy the govt needs to control before it solves human nature.



Free market capitalism has lifted billions of your "little people" out of poverty in the last century alone.



You ever think of the misery caused by central planning? Authoritarian governments literally killed too many to count in the 20th century.

At no point in this thread have I suggested that govt take over any part of the economy. What I have suggested is that too much free market rah-rah drastically overheated & crashed the financial sector & nearly took everything else with it, which is what would have happened had the FRB & the govt not intervened. Conservative ideologues will sit around with their thumb up their butts the next time that happens.

Capitalism obviously needs govt constraints to guide it in directions that benefit the people, not just the ownership class. It is our right & obligation as a free people to do just that as best we can because they won't do it for us left to their own devices. We need not like that idea to accept that it's true.

 

[fskimospy]

This thread is pretty illuminating. Economics is a soft science but there are few occasions where you will see an ideology more thoroughly defeated than conservative monetary ideology over the last ten years.

Sane and reasonable people would admit this failure and change their theories. The fact that they do not is deeply scary.

 

[Jhhnn]

This thread is pretty illuminating. Economics is a soft science but there are few occasions where you will see an ideology more thoroughly defeated than conservative monetary ideology over the last ten years.

Sane and reasonable people would admit this failure and change their theories. The fact that they do not is deeply scary.

Agreed. They're blinded by ideology.

 

[BigDH01]

At no point in this thread have I suggested that govt take over any part of the economy. What I have suggested is that too much free market rah-rah drastically overheated & crashed the financial sector & nearly took everything else with it, which is what would have happened had the FRB & the govt not intervened. Conservative ideologues will sit around with their thumb up their butts the next time that happens.

Let's not forget gov't's little (big) part in all this. Government guaranteeing loans, government offering tax incentives to home mortgages, and loose monetary policy. People may have been acting irrationally, but the government contributed at worst or did nothing to stop it at best.

And now we're in a couple new debt bubbles. Spend some time over at /r/studentloans or /r/studentloandefaulters. Look at how good-intentioned policies (expanded education) is literally ruining lives as students take on insurmountable student debt. Now at 1.5 trillion and expanding rapidly. Instead of providing access to new opportunities to the poor, we are making slaves of them.

Capitalism obviously needs govt constraints to guide it in directions that benefit the people, not just the ownership class. It is our right & obligation as a free people to do just that as best we can because they won't do it for us left to their own devices. We need not like that idea to accept that it's true.

You going to leave it to government devices instead? You think the government has been working in your best interest? This desire for benevolent authoritarianism is great when the emperor is Augustus, but not nearly as awesome when it's Caligula. With the election of Trump, you willing to risk it?

 

[JSt0rm]

Let's not forget gov't's little (big) part in all this. Government guaranteeing loans, government offering tax incentives to home mortgages, and loose monetary policy. People may have been acting irrationally, but the government contributed at worst or did nothing to stop it at best.

And now we're in a couple new debt bubbles. Spend some time over at /r/studentloans or /r/studentloandefaulters. Look at how good-intentioned policies (expanded education) is literally ruining lives as students take on insurmountable student debt. Now at 1.5 trillion and expanding rapidly. Instead of providing access to new opportunities to the poor, we are making slaves of them.



You going to leave it to government devices instead? You think the government has been working in your best interest? This desire for benevolent authoritarianism is great when the emperor is Augustus, but not nearly as awesome when it's Caligula. With the election of Trump, you willing to risk it?

Pure capitalism and pure socialism dont work. We need a intelligent balance of the two.

 

[UNCjigga]

High speed rail boondoggles and underfunded pensions and debt ridden municipalities and the worst wealth disparity in the nation...there is a lot wrong with CA.

The only reason CA is doing well is because it is riding a tech bubble that will inevitably burst, and Jerry Brown is a surprisingly fiscal conservative who has won some hard fought battles to balance the budget. Brown is a great governor. Of the candidates to replace him, Chiang is the only logical choice, but CA will probably get Persian rug pose Newsom or cheating on his wife with the newscaster Villaraigosa.

Texas was riding an oil bubble until it burst. California is a lot more diversified. Also, I applaud your concern for wealth disparities, but I'm sure the Trump tax cuts for the rich will even that out across the rest of the country.

 

[Jhhnn]

Let's not forget gov't's little (big) part in all this. Government guaranteeing loans, government offering tax incentives to home mortgages, and loose monetary policy. People may have been acting irrationally, but the government contributed at worst or did nothing to stop it at best.

And now we're in a couple new debt bubbles. Spend some time over at /r/studentloans or /r/studentloandefaulters. Look at how good-intentioned policies (expanded education) is literally ruining lives as students take on insurmountable student debt. Now at 1.5 trillion and expanding rapidly. Instead of providing access to new opportunities to the poor, we are making slaves of them.



You going to leave it to government devices instead? You think the government has been working in your best interest? This desire for benevolent authoritarianism is great when the emperor is Augustus, but not nearly as awesome when it's Caligula. With the election of Trump, you willing to risk it?

You're all over the map. The simple fact remains that conservative economists were wrong to even consider inflation as a factor during the crisis or in the several years thereafter. It never made sense to anybody but them yet they still believe in the same conceptual framework that led inevitably to that erroneous conclusion.

 

[nickqt]

No, I mean free market capitalism.

http://www.huffingtonpost.ca/michel-kellygagnon/free-markets-help-poverty_b_3721605.html
https://www.economist.com/news/lead...out-extreme-poverty-20-years-world-should-aim
https://www.dailywire.com/news/1452...alism-solves-poverty-aaron-bandler#exit-modal
https://mises.org/library/data-clear-free-markets-reduce-poverty
https://www.cato.org/publications/commentary/global-povertys-defeat-capitalisms-triumph
https://www.investors.com/politics/...s-global-poverty-and-hunger-are-on-the-ropes/
http://reason.com/archives/2014/10/08/poverty
http://www.valuesandcapitalism.com/people-across-world-prefer-free-markets/

I like this out of the last one:




https://mises.org/blog/what-central-planning

Mises describes this better than I could:



Can you not think of 3 "libruuuuls" on here who are in favor of planning some resource distributions? Three people here prefer socialized medicine?



I'm guessing Galt's Gulch is the only thing you think you know about libertarianism. Personally, I don't know much about it as I've never read Atlas Shrugged as The Anthem was too preachy and I mostly read non-fiction. Sorry your brain can't be goaded into anything more than stereotyping.

There you go again.

The economics that have brought millions of people out of poverty over the past 80+ years is Democratic Socialism. Which is to say, capitalism tempered by government.

And it has worked the best where citizens of those governments of the people, by the people, and for the people, are able to exercise their right to vote-in politicians who legislate, execute and adjudicate on behalf of the people, rather than for the oligarchs.

Free market capitalism exists in just a few places in the world. And all of those places are shitholes.

 

[Exterous]

Yes, Bernanke acknowledges that the inflationista twits like Goodfriend were humored at the time as the FRB engaged in what would have been very inflationary policy under different circumstances. Their "concerns" were based on free market ideology rather than reality.

Its his book - he no longer needs to humor them. He mentions concerns and safe guards against inflation because it was a concern for him as well. Admittedly not as big of a concern as other rather pressing issues but a concern none the less. This was uncharted territory and they - including Ben - didn't know their actions wouldn't cause inflation.

 

[fskimospy]

No, I mean free market capitalism.

http://www.huffingtonpost.ca/michel-kellygagnon/free-markets-help-poverty_b_3721605.html
https://www.economist.com/news/lead...out-extreme-poverty-20-years-world-should-aim
https://www.dailywire.com/news/1452...alism-solves-poverty-aaron-bandler#exit-modal
https://mises.org/library/data-clear-free-markets-reduce-poverty
https://www.cato.org/publications/commentary/global-povertys-defeat-capitalisms-triumph
https://www.investors.com/politics/...s-global-poverty-and-hunger-are-on-the-ropes/
http://reason.com/archives/2014/10/08/poverty
http://www.valuesandcapitalism.com/people-across-world-prefer-free-markets/

I like this out of the last one:

https://mises.org/blog/what-central-planning

Mises describes this better than I could:

Can you not think of 3 "libruuuuls" on here who are in favor of planning some resource distributions? Three people here prefer socialized medicine?

I'm guessing Galt's Gulch is the only thing you think you know about libertarianism. Personally, I don't know much about it as I've never read Atlas Shrugged as The Anthem was too preachy and I mostly read non-fiction. Sorry your brain can't be goaded into anything more than stereotyping.

It seems odd to be citing Austrian economics websites as an authority in a thread that is basically about the total intellectual failure of Austrian economics over the last ten years.

 

[Starbuck1975]

Texas was riding an oil bubble until it burst. California is a lot more diversified. Also, I applaud your concern for wealth disparities, but I'm sure the Trump tax cuts for the rich will even that out across the rest of the country.

Most economies ride on bubbles, until they burst, with those cheerleading to the top completely oblivious of the inevitable drop. I read an interesting article the other day that construction of monumental and narcissistic corporate HQs is usually a leading indicator that we're about to hit peak.

I am not claiming Texas has it right either. The widespread flooding in Houston is a testament to what happens when the regulation pendulum swings too far the other way.

Wealth disparity is a huge concern. I am sure the tax break concessions Amazon is extorting for HQ2 will do wonders for whatever city it lands in.

 

[BigDH01]

It seems odd to be citing Austrian economics websites as an authority in a thread that is basically about the total intellectual failure of Austrian economics over the last ten years.

Which is why the first link there is from Huffpo, figuring that might be the only site you'd take seriously.