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US economic resilience in wake of pandemic, inflation battle 'fantastic achievement' (weartv.com)
submitted 2 weeks ago by psychothumbs@lemmy.world to c/news@lemmy.world
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[-] Blackbeard@lemmy.world 7 points 2 weeks ago* (last edited 2 weeks ago)

It's certainly an interesting exercise in contrasting responses to a huge market shock. Obama was criticized for not doing enough, so Biden went all-in. We now know the Covid-era supply chain shocks were somewhat temporary, and rather than falling off a cliff like it did in 07/08, demand simply shifted to different markets, so one could reasonably conclude that the amount of demand-side spending through the pandemic was a bit excessive. That somewhat unnecessary influx of money is what allowed prices to jump, but it's also interesting that our rate of inflation was persistently lower than many other developed nations, so it may not have been totally unnecessary. Hopefully economists have learned valuable lessons about the appropriate response to structural failures (like the housing crash) versus structural disruptions (like the pandemic), and adjust their recommendations going forward. Whether or not the recovery fixed some of our more long-term and systemic economy-wide failures like income inequality and the GFC-induced housing shortage (i.e. it didn't), it's laudable that Biden and Powell managed a very rare soft landing when they could have just as easily triggered a full-blown recession.

[-] psychothumbs@lemmy.world 3 points 2 weeks ago

That somewhat unnecessary influx of money is what allowed prices to jump, but it’s also interesting that our rate of inflation was persistently lower than many other developed nations, so it may not have been totally unnecessary.

Isn't America's low inflation relative to countries that intervened less the proof that the influx of money was not that cause of inflation? Not so much that spending the extra money actively reduced inflation, but it just turned out to not be a major factor. Meanwhile the extra spending was hugely important for keeping the American economy growing, while underspending held back many other countries.

[-] Blackbeard@lemmy.world 3 points 2 weeks ago

I honestly don't know. That explanation certainly makes sense, though. I'll have to do some digging to see if I can find some studies that looked into it.

[-] SeaJ@lemm.ee 6 points 2 weeks ago

And yet you'll have dipshits on Pierce Morgan saying that the big question "are you better of now than you are for years ago?" Implying that most people are doing worse than they were for years ago...during the height of the pandemic.

[-] RagingRobot@lemmy.world 6 points 2 weeks ago

And they always answer the question themselves and say everyone is worse off. I am much better off though. I can leave my house and I have a good supply of toilet paper. That's some crazy gaslighting.

[-] Jakeroxs@sh.itjust.works 1 points 2 weeks ago

I was better off because I didn't have to waste as much time going into an office and being around a bunch of people.

Now I've been forced back into an office and I hate hate hate hate hate it.

[-] Addv4@lemmy.world -3 points 2 weeks ago

Basically the IMF saying that we've defeated inflation by keeping around 2% (forgetting to mention they are looking at a yearly number, and not talking about he last couple of years of very high inflation). Also very heavily glossing over the stagnant job market and ultimately saying the economy is doing swimmingly!

Also known as pretty obvious bullshit.

[-] psychothumbs@lemmy.world 7 points 2 weeks ago

Huh? Yes 2% is the usual inflation target, so getting it down to that level constitutes defeating inflation. We wouldn't really want it to go any lower, much less so low that it turns into the deflation it would take to reverse the price increases of the high inflation era as you seem to be arguing for.

Not sure what you're getting at with the job market either - we have low unemployment and high wage growth, that's about as good as job markets get.

[-] TheDemonBuer@lemmy.world 4 points 2 weeks ago

Yes 2% is the usual inflation target, so getting it down to that level constitutes defeating inflation.

But the layperson doesn't know that. When the average person hears that inflation has been defeated, they assume that means prices are going to come back down. I think it's understandable why people think that: If inflation means prices go up, then the end of inflation must mean that prices go back down. Of course, that's not the case. For reasons most people don't understand, prices must continue to go up every year, albeit preferably at a rate the experts consider manageable. You can try to explain this to people but they might not be receptive to being told that prices are just going to keep going up, forever, and it has to be that way because of some complex economic concepts that are beyond their understanding. It's honestly kind of depressing, being hit with the reality that you're always going to be playing catch up with increasing prices.

[-] Addv4@lemmy.world 0 points 2 weeks ago

Honestly, I can accept the inflation issue of prices never truly going down, but when seemingly very little is done to help offset them you start having issues. Add to that most economists loudly broadcasting that the economy is reaching new highs while a lot of middle class households have to pay more of their earnings on housing and food, and you are just sowing a lot of discontent. That is largely my issue, as irrational as it might appear at first glance to be angry with an article just saying that inflation has decreased from its highs.

[-] TheDemonBuer@lemmy.world 3 points 2 weeks ago

and you are just sowing a lot of discontent. That is largely my issue, as irrational as it might appear at first glance to be angry with an article just saying that inflation has decreased from its highs.

I don't think it's irrational at all. I think it's perfectly understandable. The typical, out of touch economist, however, doesn't understand. Their formulas, theories, and models tell them that everything is working perfectly, or at least as well as can be expected, and they're really not interested in hearing any evidence to the contrary (like the lived experiences of actual human beings).

[-] Addv4@lemmy.world -1 points 2 weeks ago

Yes, but they don't even mention the yearly target in the article, just broadly allude to inflation not being an issue anymore, even though it has actively driven prices up significantly for pretty much everything for the last few years. It is absolutely a pain point that is often glossed over when talking about the economy, usually when commenting how good it is.

As for the job market, I'm in tech. It's insanely hard to get a job right now, as most places simply aren't hiring (or worse, put up job ads but have no plan to fill them, as insane as that is). Wages have stagnated for sure, and housing has gone up in price. I haven't actually seen many high wage growth for a lot of stuff around me either, mostly just adjusting lower end wages so that people can (mostly) afford rent. 2% inflation is better than the last couple of years, but the article linked completely downplayed all of those factors. Which is why I said it was bullshit.

[-] psychothumbs@lemmy.world 3 points 2 weeks ago

Yes, but they don’t even mention the yearly target in the article, just broadly allude to inflation not being an issue anymore, even though it has actively driven prices up significantly for pretty much everything for the last few years. It is absolutely a pain point that is often glossed over when talking about the economy, usually when commenting how good it is.

I'm not sure what to make of this complaint. Yes the article assumes some basic level of understanding of what these terms mean. We had a bout of inflation, meaning prices rose quickly, and then it ended and prices are back to their usual flat or slow increase rate of change.

As for the job market, I’m in tech. It’s insanely hard to get a job right now, as most places simply aren’t hiring (or worse, put up job ads but have no plan to fill them, as insane as that is). Wages have stagnated for sure, and housing has gone up in price. I haven’t actually seen many high wage growth for a lot of stuff around me either, mostly just adjusting lower end wages so that people can (mostly) afford rent. 2% inflation is better than the last couple of years, but the article linked completely downplayed all of those factors. Which is why I said it was bullshit.

Ah well there's your issue right there - tech in particular is not doing so hot right now, but most other parts of the economy are doing great. Got to look at the data on the big picture and not just what you see in your own little niche.

[-] SeaJ@lemm.ee 0 points 2 weeks ago

2% is the target. Do you want them to go into explaining why deflating to 2019 prices is a bad fucking idea?

As for the job market, hiring is up and unemployment just went down when they were already alright. That's not stagnation. Sure it sucks for some sectors like tech (anybody know if decent paying tech jobs, hit me up pretty please) but most of the rest of the job market is good.

this post was submitted on 24 Oct 2024
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