contrary to what the one poster already said, I think 100% of the excess inflation is from bad monetary policy.
The government embraced the stonks can only go up ideology. Would not raise interest rates for any reason. Dumped mega trillions of stimulus on the business sector making $600 gamer checks look like small potatoes. Now we are growing way too fast.
The mega trillions of printing money has been happening since 2008, it's only now that we're seeing inflation. Japan engaged in quantitative easing as early as 2001 with no inflationary effects. Similarly, we dumped trillions in stimulus to banks and other businesses in 2008-2010 with no inflationary effects. We didn't even see inflation after the stimulus bills of 2020 or 2021. It's only now, with the supply chain totally broken and things starting to break down with no replacements in sight, that we're seeing inflation. That suggests a different cause than the one you're suggesting. Not saying that massive levels of stimulus are helping the situation, but the trigger does not seem to be quantitative easing or stimulus money.
No, the trigger is not the money supply. It's still a monetary policy failure to not manage demand when supply chains break down.
The 2008 example, it's not as simple as more money = inflation and that's not what I'm saying. It's more about demand management. Which yes has a lot to do with interest rates.
We didn't have inflation in 2008 but we did have this meaning people anticipated inflation at some point in the future, horded money, demand falls, inflation canceled before it began.
The problem with this though is that because of the perpetual reluctance of Western governments to use fiscal policy to drive growth and pursue public works, social welfare, or job programs, they are basically left with only a single tool (monetary policy) to manage the economy.
Yes you can say it would have been better to raise interests rates much earlier in order to avoid the asset bubbles we have now, but the ultimate effect of that would have also likely have been chronic stagnation and chronic high unemployment, and an even shittier recovery than we actually got after 2008, because there was a fundamental lack of interest or inability in bourgeois states to confront these problems in any way other than cheap credit and quantitative easing.
Certainly there are strong monetary influences on the current situation but I don't think you can understand this as purely a failure of monetary policy, because monetary policy really isn't supposed to deal with all of the issues it's being used to deal with on its own.
contrary to what the one poster already said, I think 100% of the excess inflation is from bad monetary policy.
The government embraced the stonks can only go up ideology. Would not raise interest rates for any reason. Dumped mega trillions of stimulus on the business sector making $600 gamer checks look like small potatoes. Now we are growing way too fast.
100% policy failure.
The mega trillions of printing money has been happening since 2008, it's only now that we're seeing inflation. Japan engaged in quantitative easing as early as 2001 with no inflationary effects. Similarly, we dumped trillions in stimulus to banks and other businesses in 2008-2010 with no inflationary effects. We didn't even see inflation after the stimulus bills of 2020 or 2021. It's only now, with the supply chain totally broken and things starting to break down with no replacements in sight, that we're seeing inflation. That suggests a different cause than the one you're suggesting. Not saying that massive levels of stimulus are helping the situation, but the trigger does not seem to be quantitative easing or stimulus money.
No, the trigger is not the money supply. It's still a monetary policy failure to not manage demand when supply chains break down.
The 2008 example, it's not as simple as more money = inflation and that's not what I'm saying. It's more about demand management. Which yes has a lot to do with interest rates.
We didn't have inflation in 2008 but we did have this meaning people anticipated inflation at some point in the future, horded money, demand falls, inflation canceled before it began.
Ah I see what you're saying. Yes, this has been a tremendous policy failure and the Fed definitely should have raised rates far earlier.
The problem with this though is that because of the perpetual reluctance of Western governments to use fiscal policy to drive growth and pursue public works, social welfare, or job programs, they are basically left with only a single tool (monetary policy) to manage the economy.
Yes you can say it would have been better to raise interests rates much earlier in order to avoid the asset bubbles we have now, but the ultimate effect of that would have also likely have been chronic stagnation and chronic high unemployment, and an even shittier recovery than we actually got after 2008, because there was a fundamental lack of interest or inability in bourgeois states to confront these problems in any way other than cheap credit and quantitative easing.
Certainly there are strong monetary influences on the current situation but I don't think you can understand this as purely a failure of monetary policy, because monetary policy really isn't supposed to deal with all of the issues it's being used to deal with on its own.