I'm not sure if that's completely true. Price development has a large psychological component as well, so even if you take away the cause the prices may continue to rise simply because people fear they will. Ironically this means the Tea Party will only make things worse with their fearmongering.
The 99% Declaration
- Thread starter Integral
- Start date
Well, this gets into your beliefs on monetary theory. In the long run, there can't be inflation that deviates from the money supply. And in the long run the government's control of the money supply is essentially absolute. Hyperinflation in the modern sense happens when the government is deliberately driving it for one reason or another. Whether they're just incompetent, or thought they were resolving some other issue and so it was justified.
MV=PQ
Velocity is the wildcard. That's the part that the government has no control over. But while V can collapse below trend and stay there a long time, and while it can fluctuate wildly in times of instability, it can't really do dramatic increases that are beyond the government's ability to compensate for. The trend of V is to increase at a slow rate over time as changes in technology and markets allows it to. It is not, as people who have an over simplified view of money believe, a constant.
Now nominal prices have, as you say, a momentum of their own. And inflationary expectations drive what individual market participants expect, and so build in to what price changes they make. So in the short run (in my view, not in a hardcore monetary theorist's view) the real economy drives prices. But the longer the view you take, the more that Money has to expand to accommodate changes in Price (and Quantity and Velocity, but that's a deeper story).
So inflation can happen, but only up to a point. But hyperinflation can't except with the cooperation of the government. While it can be extremely painful to put a stop to it, they can at any time put a stop to it.
There's also a problem of what people think of when they here or use the term hyperinflation. The US did not have hyperinflation in the 70s, as some people claim. It was high, but it was never more than double digit. Painful for some, quite beneficial for many.
There simply is no prospect of hyperinflation in America's future. Inflation, certainly. And there's an argument for more than we would be comfortable seeing, as our primary problem is debt (private even more than public). Claiming that hyperinflation is coming is either ignorance or demagoguery. It just has no real basis.
Thoughtful Thug
Deity
It appears sometime this weekend that some of our University students at Kent State will be starting their localized version of the OWS. They pick the best time since Halloween Fest (another reason to party) is exactly at the same time.
Waht do? Take pictures? Because I am sure I will be drunk most of the time...
Waht do? Take pictures? Because I am sure I will be drunk most of the time...
JerichoHill
Bedrock of Knowledge
take pics.
hilarity.
Should I take pics of the OWS folks outside my building @ Mac Sq in DC?
hilarity.
Should I take pics of the OWS folks outside my building @ Mac Sq in DC?
Thoughtful Thug
Deity
Take em.
And challenge accepted.
And challenge accepted.
Integral
Can't you hear it?
JH, Thoughtful Thug: take pictures!
If I ran for the delegation from Boston, would CFC support me?
If I ran for the delegation from Boston, would CFC support me?
JH, Thoughtful Thug: take pictures!
If I ran for the delegation from Boston, would CFC support me?
You promised us a report on Occupy Boston a couple weeks ago.....
More on the topic that the rich have more volatile incomes, which I mentioned earlier:
The IRS table link:
http://www.taxfoundation.org/news/show/250.html#table7
So yeah, the notion that rich keep getting richer even during recessions is a lie.
http://www.gregmankiw.blogspot.com/
The IRS table link:
http://www.taxfoundation.org/news/show/250.html#table7
So yeah, the notion that rich keep getting richer even during recessions is a lie.
Integral
Can't you hear it?
You promised us a report on Occupy Boston a couple weeks ago.....
I did! Apologies for that. I did not end up being able to go for surgery-related reasons (pre-op stuff).
If Person A earns $32,879 and Person B earns $2,155,365 (discounting tax), then Person B has $2,122,486 more than Person A. If the following year Person A earns $32,396 and Person B earns $1,432,890, then the total difference balloons out to $3,522,980. I'm not sure how you would argue that doesn't amount to Person B getting richer, and getting richer more than Person A.
The rich guys risk during a downturn is that he can't realize as much income by selling stock. The poor guy's risk is that he will lose his job.
Hygro
soundcloud.com/hygro/
JH, Thoughtful Thug: take pictures!
If I ran for the delegation from Boston, would CFC support me?
Haha you and me both.
Well, rich people make more, duh. I was not comparing the income of rich and poor, I was saying that income of rich people are hit the hardest during a recession. According to some people "the rich", through their evil plots and machinations, keep getting richer even when everybody else is getting screwed. In reality they lose more, even as a percentage, than everybody else. Now obviously they still make more or they would not be the rich.
aelf
Ashen One
Yeah, and they're still rich, while the poor get poorer. The fact that the rich earn less now doesn't really detract from the point, frankly.
Of course it does. Part of the message is that the evil 1% keep getting richer while everyone else is getting screwed, as if they thrived on crisis or whatever. In reality they are being hit harder than everyone else, and they're not really happy about the bad economic conditions. Income inequality decreased since 2007, not increased. You're not going to see many people talking about this incovenient truth, though. The narrative is: income inequality keeps rising and no financial crisis can change that because the 1% have the government on their pockets. Too bad it's a lie.
aelf
Ashen One
I certainly don't think all of the rich got richer. But some did. In the first place, some have gotten rich from creating the conditions that sparked the crisis. That alone is deserving of outrage. Ultimately, it doesn't matter if all of the top 1% benefited from the crisis or not.
Well no, as I demonstrated, the gap between rich and poor continues to widen. The rich continue to get richer, even if they are not continuing to get richer at an increasing rate. That their incomes may be more susceptible to fluctuations is window-dressing really when you consider that they're still well beyond that of the average worker. And still enough, again, to continue making them richer. Your statement 'the notion that rich keep getting richer even during recessions is a lie' is simply completely false, because the numbers you provide tell precisely the opposite story; that the gap in wealth between Person A and Person B would have widened.
Being 'rich' has much more to do with wealth than salary, so a decrease in salary is not at all necessarily contradictory with an increase in wealth, as would be the case here.
Maybe some rich people haven't gotten richer. Of course that's the case. But that's not at all what your numbers say.
