Against Economics
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Ah, but it does. It creates asset inflation. This may be the worst kind of all possible inflation because it makes people believe they are wealthier than they are. When the inflation can no longer be sustained, large numbers will soon find out they are far poorer than they once thought. That's the stuff of revolutions and Dark Times.
Asset inflation takes root through policies that distribute money, not to the poor (Great Society), but to the rich (Deregulation and Quantitative Easing). The rich have no use for the money being given out and so drive up asset prices with it.
From this perspective, it's easier to see how a multi-thousand word essay on new economics fails to mention negative interest rates once.
> Doubling the amount of gold in a country will have no effect on the price of cheese if you give all the gold to rich people and they just bury it in their yards, or use it to make gold-plated submarines (this is, incidentally, why quantitative easing, the strategy of buying long-term government bonds to put money into circulation, did not work either). What actually matters is spending.
Are you suggesting that negative interest rates are some kind of solution? I think they would make the problem worse, just like QE; the effect would just be to expand the money supply by injecting more money into the economy on the basis of arbitrary rules.
With negative rates, the incentive becomes that everyone should borrow all the time (because borrowing becomes profitable), so then the question will quickly become "who is allowed/qualified to borrow?" and the answer will either be "rich people" or some other kind of unfair arbitrary criteria.
Negative interest rates are a terrible idea. All the extra money will be absorbed by cryptocurrencies, advertising platforms and other speculative investments.
Exactly right.
MV = PT
Central banks would love it if they could precisely control inflation by creating and destroying money.
What actually happened with QE is that M increased and V decreased in almost the identical magnitude, leaving P and T virtually unchanged.
Central banks have very little influence over the real economy, aside from short-term changes in interest rates.
One can argue the reasons why. Is of the same problem with KPIs in general thay we only measure things which are easy to measure and omit the difficult but often much more important things to measure?
Or is it a conspiracy plot in which the governments realized that the only way to repay those ever increasing government debts is by inflating them away. Ie. borrowing at 1% akin to CPI reported inflation instead of at 8% which is what the actual inflation might be.
Is this argument still valid? It seems like it would be since it still seems moving in and out of a mortgage is a longer (by months) process than moving in or out of a lease.
I’m wondering increasingly lately if oil hasn’t replaced gold and fiat as the underlying backer value of currency. We had a problem in Econ to contrast and compare fiat currency to gold backed currency. Fiat is supposed to not be tied to a scarce resource and thus central banks have the ability to influence market growth through currency growth. Gold or resource backed currency can only grow at the rate new stock is removed from the ground. Of course, oil complicates there concept as oil is irreversibly consumed when it’s burned. The value of it still greatly affects market growth potentials though.
But not all countries are oil exporters, or oil “holders”; and even those who are, are not exporters to the same order-of-magnitude. This creates very clear market effects where e.g. the value of the Canadian dollar at any time is essentially the value of the US dollar divided by the quantity of US oil exports.
This would be like different gold-backed sovereign nations declaring a different, floating “ratio” of their fiat currency’s value to their level of gold deposits, such that changes in the price of gold would throw exchange rates around (and some nations having no gold at all, and thus having an exchange rate that measures only how much of some other country’s gold their fiat currency could buy you!)
You can then use the inflation signal from Core CPI to correct other measures for inflation, in order to see what those other measures are doing beyond just inflating. (Maybe they’re doing something like “inflation squared”, but that’s still a separate thing, which you still need a measure of base-term inflation to find out!)
The rich think they are rich because they actually are rich, and they expect to be rich in the future. The value of the stock market is high because profits are high, and the owners of stock expect them to remain high. They could be overoptimistic about the future, but its driven by future expectations about the real economy.
They are 0. Does that mean that all stock price inflation for such securities is just a bubble? Of course not.
NPR did a podcast a few years ago on six policies it’s ideologically diverse panel of economists all agreed on: https://www.npr.org/sections/money/2012/07/19/157047211/six-...
They are:
1&2) get rid of tax deductions for mortgage interest and healthcare
3) eliminate corporate taxes
4) replace payroll and income taxes with consumption taxes
5) impose carbon taxes
6) Legalize marijuana
Perhaps unsurprisingly, Europe, Canada, and Australia have all been moving in the above direction (at least slowly) over the past 30 years, marking a period of return to growth after decades of economic doldrums where they were uncompetitive with the USA.
There is even less disagreement when it gets into microeconomics. Everyone agrees that markets produce efficient prices so long as you account for externalities. So for example, an EPI study polled economists about the $15 minimum wage (who identified as Democrats 3:1 as compared with Republicans): https://www.johnlocke.org/update/what-do-economists-think-ab.... 75% thought it would negatively affect employment, and 84% agreed it would hurt youth employment.
Similarly, few economists support rent controls: https://www.economist.com/leaders/2019/09/19/rent-control-wi...
Indeed, the consensus on government price controls is so deep that, with the exception of isolated things like rent control and the minimum wage, where people don't perceive it as price regulation, even liberals don't really call for price regulation. That is remarkable, because price regulation was a feature of life until the 1970s. Airline tickets, freight trucking, phone bills--all were priced not based on markets, but based on bureaucrats picking numbers.
how can this be implemented in a fashion that's non-regressive? income taxes in most countries are progressive, and consumption taxes are regressive.
> A direct, personal consumption tax may take the form of an expenditure tax, that is, an income tax that deducts savings and investments, such as the Hall–Rabushka flat tax. A direct consumption tax may be called an expenditure tax, a cash-flow tax, or a consumed-income tax and can be flat or progressive...
> This form of tax applies to the difference between the income of an individual and the increase/decrease in his savings. Like the other consumption taxes, simple personal consumption taxes tend to be regressive with respect to income. However, because this tax applies on an individual basis, it can be made as progressive as a progressive personal income tax. Just as income tax rates increase with personal income, consumption tax rates increase with personal consumption. Economists from Milton Friedman to Edward Gramlich and Robert H. Frank have supported a progressive consumption tax.
For example, Exampleville institutes a consumption tax of 15%. Such a tax is regressive because consumption is usually a smaller proportion of a wealthy person's income than a poor person's income. To counteract this, Exampleville pays a monthly cash grant to all citizens and adjusts the payment level so that the cash grant is larger for the poor and smaller (or non-existent) for the wealthy.
See https://tax.purpleplans.org for an example of a real proposal that mimics this scheme.
Personally I think there is almost no way to make this work without being highly regressive.
However, if you just tried the experiment, then to the extent it redistributed resources, it would be taking more money from those who consumed more at a given level of income, and giving it to those who consumed less.
So it would probably reduce consumer activity, and I don't know if that would be good for the economy in the long run. I don't think it would be a null-op though. It doesn't seem like a logical or mathematical contradiction.
I don't really see how these can be true given that, as you state, wealthy people spend a smaller portion (a lot smaller) of their income than do poor people.
To toss out some numbers, let's say the wealthy person makes $1M per year at a 35% effective income tax rate and the poor person makes $50K per year at an effective 10% income tax rate. Let's further suppose the wealthy person spends half their after-tax income, and the poor person spends all of it. Total tax revenue in this case would be $355K under the income scheme, but if we switch to a consumption tax, the tax revenue drops to $55,500. There's no amount of benefit allocation you can do to make up the difference. On top of that, the tax burden for the wealthy person (after offsetting for the benefit allocation) is still massively lower than under the income scheme, even if they get $0 in benefits. You'd have to raise the consumption tax ridiculously high (33% !) to get close, which will effectively discourage expenditures and encourage savings, pretty much destroying the US consumption-based economy.
I just can't see a realistic scenario where this setup isn't regressive or generally a bad idea. If you want to keep a progressive system but also eliminate income tax, we need to consider a wealth tax.
I don't think 33% is ridiculously high. VAT is 25% in Norway, Sweden, and Denmark, 27% in Hungary; and their economies are doing well.
This isn't an especially productive comment and I should probably delete it before I hit the reply button.
We love to complain about billionaires and hedge fund managers, but 80% of the income in this country accrues to a group of people that has entry-level college graduates at one end and top Google engineers at the other end.
The thing about the WSJ graphic that everybody made fun of: https://franklycurious.com/wp/2013/01/16/pity-the-rich/
...is that whatever people in that income range are really like, and however little sympathy they deserve, they are the golden goose that provides the lion's share of revenue for the government, so politically, there always has to be a game of chicken when tax increases are discussed. That's where the money is, so how much can be taken without harm to the economy?
I would bet that expropriating billionaires would have surprisingly little effect, but most of the people who would like to do it think six figures is rich too.
Folks at the top 30% mark still benefit from income inequality. (That is to say, they earn a larger share of national income than their share of the population.) If you tax the entire top 30% an average of 25% you could increase revenues by double what Warren's proposed wealth tax would bring in. (And you wouldn't risk driving businesses and jobs to Canada.)
This "Atlas will shrug" thing is trite posturing, not to say that there cannot be other drawbacks to populist revolutions.
From Matt Levine's column describing people threatening that Argentina will become "uninvestable" if it doesn't do what bondholders want:
"[Argentina] defaulted in 2001, imposed 70% haircuts in 2005 and 2010 restructurings, was in default on interest payments on the new restructured bonds from 2014 until 2016 due to legal disputes, finally cleaned up its act and returned to the international bond markets in 2016, and then in 2017 issued a hundred-year bond that international investors lined up to buy. Now those bonds trade at about 40 cents on the dollar, and international bond investors have the gall to be like “well if you default nine times we won’t lend to you a tenth time,” come on. They bought 100-year bonds one year after the last default ended! “There is a limit to what they will endure,” sure, but after two centuries of diligent searching Argentina hasn’t found it. "
Taxing away your capital is like selling your furniture for quick cash. You’re not skimming the fat, you’re cutting into muscle and bone.
As to Argentina, it had to offer a 7.9% interest rate to move those bonds in 2017. If we refinanced our national debt at those rates, we’d be paying $1.5 trillion a year on debt service, about what we spend on Medicare/Medicaid and defense out together.
It sounds like you're implying the secret is being nice to the big capitalists so they keep their capital in your country. But I don't think that's the way the world works, and it's precisely because most people think that's the way it works that most of the world cannot catch up.
Big companies in the US are largely owned by Vanguard and Blackrock and so on. They're already collectively owned by the people, despite all the talk about inequality. Prosperity depends on this system, not billionaires.
It's not that the US couldn't wreck things by acting like Argentina, but that people shouldn't pay attention to the super wealthy posturing. And the more they talk nonsense, the more they encourage radical actions, because true things can't be believed.
You lost me here, and revealed much about your thinking. Please explain how a “market” is anything other than steady state if all externalities are accounted for? Profit, by definition, means getting something for nothing. Without externalities, capitalism doesn’t exist.
Profit, I would say, is really the same thing as interest, i.e. return on capital, just with the connotation of being less predictable.
And interest, I would define not as something extra for doing nothing, but as a deferred payment for the labor that created the capital, which serves the important social purpose of rewarding people for deferring the consumption of the fruits of labor.
That's why people have not found a way of eliminating it, even though usury has been criticized for thousands of years.
1. Externalities can be positive. For example, the government builds roads, and doesn't account for the benefit to private industry on their books.
2. You're in a forum with a lot of software engineers; do you really believe that every new piece of software that brings $X in revenue necessarily costs society $X somehow? What mechanism causes this? Saying everything has externalities is far from saying they are always significant, or if significant, they are equal and opposite to the internalized value.
It simply doesn't exist, so it's not considered.
So economic theory is blatantly biased towards the accumulation of profit for shareholders, and blatantly biased against a realistic assessment of the social costs of those profits.
Simple example: AirBnB. Some people - mostly property owners - make money.
Other groups - people who need to rent property at a reasonable price - lose money.
You won't find the latter represented on the balance sheet. What looks like a potentially profitable operation actually turns out to have a huge social cost. Effectively it's moving money from a relatively unprivileged group to a relatively privileged group.
This is not a hypothetical example - it's a real problem in the area I'm living in, where the supply of long-term rental property has almost disappeared because owners can make more money from short-term tourist rentals.
Economics relies exclusively on these kinds of effects. There is no concept of "social profit" which is a guaranteed positive benefit for as many affected parties as possible.
And without that, economic theory becomes a vicious feedback loop that prioritises the redistribution of money over genuine value creation.
There are vast swathes of economic literature and theory dedicated to the study of external and social costs and how to best estimate and adjust for them. Claiming there is no concept of 'social profit' in economics is akin claiming there is no concept of testing in software development...
Also, I've noticed how actual economists speak of "economic profit". Whether you use the word "economic" or "social" or anything else, the modifier implies there is some deeper truth than whatever a given accountant writes down.
What people seem to disagree about is whether everything that is not illegal is permitted, or whether businesses should be expected to adhere to implicit codes of ethics and proper behavior without specific regulation.
It's not surprising that many people want a strict separation of responsibilities, but obviously governments are having an increasingly hard time keeping up, partly because of technology and partly because of politics.
I don't think that a society where people compete with each other and are restrained by laws is fundamentally new; that's been around for thousands of years. It's just that information technology is increasingly enabling the exploitation of discrepancies between actual laws and the common assumptions about what they do.
I took micro-economics in highschool, and when discussing how trade is overall beneficial, they trotted out the old example of two countries, each producing bicycles and bananas.
The purpose of the exercise is to show that if each country focuses on one item and specializes on it, everyone benefits.
I always found that example to be deeply disturbing. If given a choice, who would actually prefer to live the banana country rather than the bicycle country? Even in highschool this silly example demonstrated the absurdity of classical economics.
That panel consisted of five American economists (Luigi Zingales is perhaps an immigrant but working in an American university). Two of them appeared to be om the Democrat's side and three aligning with the Republican party. That is not very ideologically diverse.
Clearly not everyone does. A big part of the heterodox economists even denies the existence of the notion of “efficient price” and rejects the concept of equilibrium.
What you call “everyone” is in fact the huge group of “Neoclassical synthesis” economists, which is super dominant nowadays, but it's not at all everyone.
In a more charitable reading, he's reacting to one or a few instances where it is taught but shouldn't. That could be accurate, if contextually misleading and possibly myopic.
Discounting his argument based on factual errors is fine, but given that you only bring one counterpoint to the table, "another non-economist getting famous for criticizing economics from a position of comprehensive ignorance" sounds like an argument from authority.
Whenever I search for this, I have a tendency to find articles that already assume the reader has read on the topic numerous times (like this one), or they they only address the topic in the most watered-down and overtly partisan manner.
From reading between the lines on the first few pages of google results, it seems like Keynesian thought in the 1970s hadn't evolved far enough to recognize that inflation could have multiple driving factors and could impact different parts of the economy disproportionately. My limited understanding too is that this was resolved theoretically and with obvious and clear explanation in the years afterward (now referred to as neo-keynesian), but by then Milton Friedman had been lionized as the new economic "truth" and the universe moved on in his direction.
Take for example stagflation. Previously, economists assumed a simple linear relationship between inflation and unemployment (Philips curve). That failed to hold in the 1970s.
And now, economists assume a simple linear-dynamics relationship between expected inflation and unemployment (augmented Philips curve).
Milton Friedman argued that the trade-off only existed for unexpected inflation. Once everyone anticipates that inflation, it will have no impact on unemployment. That's what happened in the stagflation era.
The New Keynesians use an expectations-adjusted Phillips curve, which take into account this effect on expectations. In New Keynesianism there is a short-run trade-off, because prices do not instantly adjust, but there is no long-run trade-off once prices actually do adjust.
http://gen.lib.rus.ec/book/index.php?md5=16D0875D5BCCD74581E...
But I don't know what Friedman had to do with this or how it affected theory.
[1] https://en.wikipedia.org/wiki/Early_1980s_recession_in_the_U...
As a pessimist, it seems to me that assuming there are resilient homeostatic mechanisms preventing inflation, then they must be obscure, given that politicians have not been able to screw them up for quite some time. And that means that when they do break for whatever reason, markets may not be aware for an indefinite amount of time. Like, for instance, lately people have been worrying about the US President trying to bully the Fed. It's hard to tell if he's had any effect, if he was right in his opinion, and whether he has found or will find any new lever to influence them.
I don't really think it makes sense to regard the Fed as an entity that still entails the Volcker era, and I'm doubtful that markets really have faith in it that way. I'm inclined to think more along the lines that often markets just go along assuming nothing has changed until there is a shock or crisis that shows they have. Like Wile E. Coyote running off a cliff.
Here’s an excellent article:
https://nplusonemag.com/issue-34/reviews/other-peoples-blood...
For example having all economical models based around people exchanging goods and not focusing on why money actually disappears from economy in form of monopolies and money parked in real estate. It always has to be poured back into economy in form of money stimuli like QE, yet people are blind to the fact that it yet again gets eaten up by ever bigger monopolies and more expensive real estate. A simple network model of money circulating in economy would show that these sinks are where the money keeps disappearing.
Yet no economic school has its primary focus set on these money eating sinks. The closest school is actually the once mighty, now close to extinct Georgist school, in which they at least explain the business cycle of booms and busts as housing cycle, where housing bust is not some random consequence of a business going bonkers, but housing (actually land speculation) being the major cause of these cycles.
If you think about it 100% of population (except for hobos) are involved in real estate market and paying close to 50% of paycheck on housing in some form. Yet all economics focus on stock and bond markets and exchange of random little items even though these are dwarfed by the housing markets.
I don't think it is a conspiracy, but laziness. People like to research things which are easy to research, but not things which are difficult but important.
You won't find your theory about money sinks, because it's a theory unique to you. It may be the greatest breakthrough in the history of economics, but it's not a theory that currently anyone else believes in. I personally am skeptical.
This has always been my main frustration with economics. As a field, it certainly has value and usefulness, just like sociology, anthropology, or any of the 'softer' sciences. However, it eschews the tradition of teaching a variety of views and perspectives for the rigid orthodoxy of classical physics or chemistry, without the clean experimental results to back it up.
Microeconomics and econometrics take a much more concrete and practical view and well-describe localized economic phenomenon, but macroeconomics is a bastardized combination of sociology and capitalist political theory mashed into an unfalsifiable 'science' and taught as such.
You're right about micro though.
Yeah, I'm cool with macro conceptually, but we shouldn't pretend it's something it's not. The history is super interesting too, it connects with tons of important events, countries, and changes in the perception of society.
> You're right about micro though.
Interestingly micro is the one place where you can run moderately-well controlled experiments too :D.
Sugarscape as well, if we stay in coding world.
Kahneman and Smith also won the 2002 econ Nobel for experiments -- Kahneman for decision-making under uncertainty, and Smith for experimental markets.
It used to be called political economy. But macroeconomics went off on a math-trip in the 20th century that rivals string theory in its practical applications.
It also serves as highly effective propaganda for its embedded political ideas. It's a lot harder to question the politics if you've been indoctrinated into believing they have the truth of a natural science.
If what you're teaching is simply "natural law", then "it is what it is". If it's a moral discipline (which was what Adam Smith rooted his study in), it's ... rather something else.
There are some useful bits to economics. There's a lot of cruft in it as well. A huge part of the value of studying the field isn't the knowledge you gain about the world, but of the delusions of many of those who claim to understand it, or know what should be done for it.
Everything depends on context. That means that results won't apply 100% of the time.
It doesn't mean that economics is useless, medicines don't work the same way with every patient, but it does mean that you have to humble about what you know and be prepared to change your mind.
My problem is the misrepresentation of a sociology-like field as experimental physics, or worse, a study of morality. Both are exceptionally common in economics, and I've had several teachers and professors present it that way. It's the orthodoxy surrounding a very specific, Reagan-era capitalist interpretation of the function and behaviour of a society taught as a universal law.
And I would agree generally but I think your reasoning is wrong. Economics of itself dictates no outcome. This is an argument that sociologists often make (i.e. the person uses the tool but the tool also uses the person) but, ironically, this is an example of trying to universalise a principle of sociology to an area where it doesn't really apply. Why? Because if you want to value any end...just build a model that does so.
And btw, arguments generally about the function of a society are politics. You will find this kind of thing taught in politics, not economics. Economists can have a view on them but you have to use politics to demonstrate that any goal of society is better than any other...which is inherently subjective anyway. Ironically, the main people who complain about economics having an orthodoxy about the function of society generally have fairly rigid ideas on this topic already.
I love this dig specifically because you missed my point. I was simply addressing the fact that I don't think a field needs to have experimentation to have value.
> And btw, arguments generally about the function of a society are politics.
No shit.
> Because if you want to value any end...just build a model that does so.
> Economists can have a view on them but you have to use politics to demonstrate that any goal of society is better than any other.
That's exactly my point. Economists conflate their model of Western Capitalism (for better or worse) with a moral position or _necessary_ condition for society.
I know their are economists that don't do this, but none I've met or been taught by.
I have same problem with astrology and numerology. Useful and entertaining and you can read about it in almost every newspaper but where is the proof?
Progress in economics is slow, but there is progress. Questions do get settled. We don't mull over issues indefinitely. Most disputes about macroeconomics were settled by the financial crisis. We have all new disputes now.
The general answer to this is that public spending crowds out private spending as both are bidding for the same goods and services.
Not sure if that's a good explanation, but the article doesn't seem to address that conventional wisdom.
I think "this time is different" thinking is dangerous. Yes, maybe the world is different now, but it's only been 10 years since the big crash, not so long.
Expecting the world to keep being the same as it is now is just as dangerous as thinking it will always be as it was for the last 50 years.
Let me stop you there. Economists aren’t trying to create the exact theory that market participants implement. That would almost certainly be short sighted to the point of uselessness. (How often in your life have you woken up with Plan A and wound up doing B - where B is very different from A?) Instead, they’re looking for a theory that agrees in the outcome and may be applied usefully to describe what’s going on in resource allocation. This probably flies in the face of a technology focused era in which surveillance of the masses at the nearly perfectly micro/individual level is a prime factor in market valuation. Some of the largest corporations today have access to data no economist ever dared dream to consider.
That actually makes me think modern surveillance companies (google, Apple, amazon, etc) could really make market models from the individual to market level in aggregate.
Versus the topics at discussion here - which are macroeconomic. Macro is often hurt by a lack of data since there are only so many years of data of the goings ons of nations in a global context - with probably not enough variation to make conclusions.
- https://www.amazon.com/Debt-First-5-000-Years/dp/1612191290/
- https://www.amazon.com/Bullshit-Jobs-Theory-David-Graeber/dp...
His views are surely influenced by his a-priori politics, but I've found his ideas thought-provoking to say the least.
"Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other's garages..."
Danny Blanchflower was, at one point, influential amongst the Corbyn crowd. Around 2013-15, he made a prediction that wage growth wouldn't rise as unemployment fell. This was true for a while...until 2015, and wage growth was nearly 4% a few quarters ago.
The idea that high employment won't cause wage growth is something that you will, however, hear repeatedly from Corbynites.
Btw, economists, unlike the author, tend to be quite sensible on the Phillips curve and understand that the relationship varies.
This seems to be a weird oversight on the part of the author. Even if we accept the heterodox view of money creation as espoused by this article (which I do, for what it's worth), the central bank still plays a very important role even in the private creation of money. Setting the "risk-free" interest rate for the economy determines how much money banks are going to be willing to lend, which thereby determines how much money they will create. Just because the central bank is not printing the money themselves does not mean that their policy levers are not having profound effects on the money supply.
Just need to look at what's going on in Venezuela, right now.
Increased supply of anything lowers it's value.
Network goods? Are telephones more valuable when more people have them? Road networks?
Just pointing out that many things in economics are not so obvious.
You're right that you need to cite things that go against the orthodoxy. At least to have sane debates. But of course he could have cited the current money printing era, where if you believe the official figures there's not a lot of inflation anywhere in the west. I'm not so confident in the figures, but that's at least some evidence that printing a load of money doesn't cause inflation.
Unless I'm grossly missing something.
In a phone network, there are a few different tipping points where the _ubiquity_ adds additional value. At a certain point, having a phone is worthwhile because everyone you could possibly want to talk to also has one. (this is also why I still have an account on Facebook).
The same can be said of a currency network. It becomes more valuable the more people you can exchange it with. People using US dollars outside the US gain value from knowing they have a trusted "stable third party" currency, and at the same time US dollars become more value to citizens of the US because they can now use that currency for purchases in that other country.
Having 20 phones with one owner is practically worthless, even though the network capacity is theoretically high. Distributing those phones among twenty people is what generates the real value. But you can't really distribute 20 phones equally among 200 people.
You need sufficient saturation of currency for its distribution to be of any real value, because you need enough quantity to be able to use it to do its job as a holder of arbitrary value exchange.
I just don't get why that necessarily has anything to do with supply itself. It has to do with the distribution, and as a result, the quality or utility of the network.
As you said, one person having 20 phones is off dubious value, but 20 additional people with phones might increase the network's quality.
The supply (20) is independent of the resulting quality/saturation/useful node count.
On the other hand, increased nodes could be seen as a negative. Like the US-Russia hotline. Or Facebook after it opened up to users without college email accounts.
Sometimes supply might affect the quality of a network, and therefore the value of having a node (phone) on that network. But to say supply increases with demand is misleading, to me. Increased quality increases demand, at a rate greater than the rate demand is decreased due to increased supply.
If supply happens to increase quality, then yes supply might dominate the equation such that demand increases as supply increases. But that doesn't mean the fundamental relationship between supply and demand has changed, it's just been minimized for particular cases.
Or maybe I'm just getting confused by transitive semantics.
I haven't seen anyone touch on it in this thread, but I've read opinions where people have blamed companies for hoarding all of the newly available cash, especially for stock buybacks.
If there's any truth to that, it would make sense, since companies can usually get better rates and first dibs at market level loans/ bonds/ etc than small business or individuals.
In the phone analogy, (if we assume there's some value having multiple phones) this would be like a new dialing prefix being released, and companies buying up the numbers hundreds at a time at bulk rate discount, leaving little or no additional numbers for individuals.
So supply was increased, but the businesses hoarding new numbers prevents any quality improvement if the network.
Now let's try applying that to bus networks. The more busses we have on the road, the less they're worth. If we reduce the supply of busses, then busses will be more valuable.
But this ignores the network effects of increasing the supply of something. If we increase the supply of busses, then we also increase the demand for busses and the value of busses through increased ridership. A single bus is worthless, but a fleet of busses is valuable to a community.
The quality of the transportation affects the value. Which in the case of buses, more buses equals a better, more frequent and readily available product. The number of seats isn't the limiting factor. It's just a side effect of somewhat standardized bus sizes.
Am I missing something?
Venezuela is a disaster because its export industries collapsed, and it doesn't have the advantage that western countries have of being an inward investment destination. So all sorts of things have to be imported, and the dollars needed to import them become increasingly scarce.
Printing money is a symptom. If the presses stopped then all that would happen is that paper money would become increasingly scarce as well as worthless.
[0] https://www.oxygenplus.com/blogs/articles/why-oxygen-plus-is...
The monetarist pitch was sexy because it sounded intuitive and elegant, that's why it spread so broadly. But it's worthless. Too bad for elegance and intuitiveness, if the reality doesn't match your model, you must throw it away.
> Increased supply of anything lowers it's value.
It doesn't work this way for money. otherwise,how would you explain that Euro isn't getting cheaper in dollar since 2015 when BCE is injecting billions of Euros on the market while the US has stopped QE for a while?
[1] https://fredblog.stlouisfed.org/2014/08/m2-velocity-and-infl...
The orthodoxy of "everything is supply and demand" has failed to predict many recent, important macroeconomic phenomenon. On the hand, the heterodox economists that draw from a variety of traditions and ideologies have had a reasonable success rate with predicting some of these important events; yet they are still treated as crackpots.
The reality is orthodox economics is just one theory of politics and the organization of society, which sometimes applies and sometimes doesn't. Treating everything as just "[the] definition of supply and demand" forgoes observing interesting and important phenomenon that seemingly work in opposition to or independent of supply and demand. Ignoring these phenomenon restricts your ability to understand and predict macroeconomic effects, and degrades your legitimacy as a 'science'.
Can you give some examples of these many unpredicted phenomenon?
https://www.nybooks.com/articles/2019/12/05/against-economic...
I like to read the critics, contrarians. Including some I deeply respect but strongly disagree with, like Tyler Cowen.
Keeps me sharp, honest. With myself. Hopefully.
The proper criticism to basic economic laws isn't that they don't control, it's that we systematically underestimate (another measurement error!) our capability of applying them well, both ex post as well as and especially a priori.
The same problem exists in all fields, it's just that many problems are relatively more tractable; solutions may not diverge as quickly, are more tolerant of inaccuracy and imprecision, generally producing more useful results. But at some point your numbers are sufficiently off that your predictions and models produce results widely at odds with reality. Such as all the various crazy and contradictory hypotheses regarding cosmological phenomena; hypotheses which turn on tiny uncertainties regarding various parameters.
But in economics there are fewer constants and a heck of a lot more free variables for even simple predictions. It's quite literally intractable. That's why people often conceptualize "the market" as a giant calculator. We know the basic principles to the calculator, but at scale nobody can arrive at the solution faster than the giant calculator itself. Anyone telling you they can do so is necessarily lying to you. But in general the only people telling you that are politicians, pundits, and other people with an agenda, though sadly too many of them are also economists.
When we're talking about demand for money, an increase in demand for money means that it is valued more highly than goods or services. The price of money in this context, is ... goods and services. That is, a higher demand for money means a (comparatively) lower demand for goods and services.
Which is to say, a propensity to offer a smaller amount of money for a given unit of goods and services.
An increased demand for money === a decrease in nominal prices. By supply/demand logic.
Actually, that works for anything, like bananas--you'd pay more bananas for the same amount of that paper currency, thus the price in bananas increases.
I haven't read this particular article, but I've read elsewhere that traditional tools used by central banks to increase inflation are being observed to empirically no longer work. I understand many of these techniques are analogous to "printing money" in a controlled way. That points to failures in their models of the economy and of inflation.
I also think I've read that at least some of the reason for this may be higher than expected levels monopoly-type powers active in the economy that conspire to keep prices and wages, and therefore inflation, down. My recollection is hazier on this part.
Edit: this might be the article I was thinking of:
Are Superstar Firms and Amazon Effects Reshaping the Economy?: The biggest companies may be influencing things like inflation and wage growth, possibly at the expense of central bankers’ power to do so.
https://www.nytimes.com/2018/08/25/upshot/big-corporations-i...
> Two of the most important economic facts of the last few decades are that more industries are being dominated by a handful of extraordinarily successful companies and that wages, inflation and growth have remained stubbornly low.
> Many of the world’s most powerful economic policymakers are now taking seriously the possibility that the first of those facts is a cause of the second — and that the growing concentration of corporate power has confounded the efforts of central banks to keep economies healthy.
> Mainstream economists are discussing questions like whether “monopsony” — the outsize power of a few consolidated employers — is part of the problem of low wage growth. They are looking at whether the “superstar firms” that dominate many leading industries are responsible for sluggish investment spending. And they’re exploring whether there is an “Amazon Effect” in which fast-changing pricing algorithms by the online retailer and its rivals mean bigger swings in inflation.
There are circumstances where printing money does increase inflation.... and circumstances where it does not:
> When short-term interest rates reach zero, further monetary easing becomes difficult and may require unconventional monetary policy, such as large-scale asset purchases (quantitative easing).
* https://www.brookings.edu/blog/ben-bernanke/2017/04/12/how-b...
* https://en.wikipedia.org/wiki/Zero_lower_bound
It should be noted that central banks are not omnipotent: they do have some influence, but they do not have all the influence. When governments enact austerity, which depresses demand and economic activity, thus reducing inflationary tendencies, they are working at cross-purposes to the central banks.
After the Great Recession we saw central bankers cut rates, but governments cut spending, thus the two cancelling each other out to a certain extent.
> Suddenly it seems as if everyone is talking about inflation. Stern opinion pieces warn that hyperinflation is just around the corner. And markets may be heeding these warnings: Interest rates on long-term government bonds are up, with fear of future inflation one possible reason for the interest-rate spike.
> But does the big inflation scare make any sense? Basically, no — with one caveat I’ll get to later. And I suspect that the scare is at least partly about politics rather than economics.
* https://www.nytimes.com/2009/05/29/opinion/29krugman.html
The economic models said that the Fed should have decreased interest rates until they reached -6.7% (i.e., well below zero), but this that was impractical, the next-best thing was flood the market with cash equivalent, and that inflation would not appear:
* https://krugman.blogs.nytimes.com/2009/11/16/the-madness-of-...
> It seemed totally obvious to many people that with the Fed adding to the monetary base at breakneck speed, high inflation just had to be around the corner. That’s what history told us, right?
> Except that those who knew their Hicks declared that this time was different, that in a liquidity trap the rise in the monetary base wouldn’t be inflationary at all (and that the relevant history was from Japan since the 1990s and from the 1930s, which seemed to confirm this claim). And so it proved, as shown by the red marker down at the bottom.
* https://krugman.blogs.nytimes.com/2015/05/17/money-inflation...
> According to mainstream theory, among the characteristics of a liquidity trap are interest rates that are close to zero and changes in the money supply that fail to translate into changes in the price level.[2]
* https://en.wikipedia.org/wiki/Liquidity_trap
The [2] is a 1998 paper by Krugman talking about Japan. So ten years before the Great Recession there were already models on how to think about increasing M2 from other countries' experiences.
It's also worth noting Keynesian economics was 70 years old in 2008. People willingly forgot this stuff to justify other political priorities.
"A good example is in a recession, the stock of money may rise 5%, however, people will be making fewer transactions and therefore the velocity of circulation will fall. This explains why quantitative easing (increasing the money supply) did not cause inflation between 2009 and 2016." [0]
The article I link below contains 3 more examples:
[0] https://www.economicshelp.org/blog/111/inflation/money-suppl...
"We now live in a different economic universe than we did before the crash. Falling unemployment no longer drives up wages. Printing money no longer causes inflation."
He is stating that we are in a different universe, with the clear implication being that the following items, which he does not qualify, are the new reality.
If the valuations of housing and stocks rise, this isn't inflation: If I owned them then I can sell these and buy more consumables than before, not less.
Replace A with "printing money" and B with "increased inflation."
Increasing the money supply has caused massive inflation; the price of gold isn't where it is because the colour yellow is in fashion. Asset prices are out of control.
Gold hit a peak about eight years ago, and before that, while it was going up in kind of an apparent smooth exponential curve, there wasn't any significant blip from the financial crisis, 9/11, or anything else. Is there even a generally accepted explanation for this behavior? If post-crisis spending is blamed, how did the market for gold "know" for years in advance?
I put it to you that the value of gold is not really rising at a real rate of 6% per annum. That is better than the US economy! It is much more likely that QE caused asset price inflation. Silver probably doesn't get treated so much as an asset because storing it is so much harder than gold.
It hasn't. It grew (a lot), then fell, then grew (more reasonably) again.
This is not the kind of shapes you are supposed to see when talking about inflation. Using “mean growth” is meaningless in that context.
It is a fact that there is a big real gap between the pre-QE price and the post-QE price. You can hand-wave and claim that because the chart is the wrong shape it doesn't count - and argument which I obviously am going to reject. But even accepting that, are you really comfortable saying that these commodities are securing real value increases? I'm a mining engineer and it isn't because it is getting 3-6% per annum harder to mine commodities each year in real terms. If you don't like 2005 pick any year prior to the financial crisis; gold is mysteriously outperforming the inflation.
Quacks like a duck. QE probably went in to asset prices.
But sharp drop isn't an option, hence my argument.
> It is a fact that there is a big real gap between the pre-QE price and the post-QE price.
Sigh! The graphs show that there is no such “gap”.
> But even accepting that, are you really comfortable saying that these commodities are securing real value increases? I'm a mining engineer and it isn't because it is getting 3-6% per annum harder to mine commodities each year in real terms.
If course it's not tied to any real value, that's never been my argument. The initial point was: “increase in the money supply by QE didn't cause the prices (including asset prices) to rise”. And you even agree with that when you say this.
> If you don't like 2005 pick any year prior to the financial crisis; gold is mysteriously outperforming the inflation
(And BTW gold is rising again in 2019, while there has been no QE policy in years in the US).
Obviously it is an option; it just happened with gold.
> Sigh! The graphs show that there is no such “gap”.
Price was $15,000/kg in US dollars and is now cruising pretty easily above $40,000/kg US. You can sigh and pretend not to see it all you like but you are still ignoring pretty clear evidence of about 8% nominal growth/6% real growth annually in a shiny rock.
I'll admit to being quite impressed that you can look at a 260% price change upwards and say it doesn't count as a price increase because you think the chart is the wrong shape.
> And you even agree with that when you say this.
No I don't. QE is the most likely factor causing these unreasonable 'real' increases in asset prices that are very well illustrated in the gold price. The idea that gold is getting more valuable in real terms is foolish, so the fact it is showing such outrageous gains in real prices since pre-QE is strong evidence that actual inflation in assets is higher than 2%.
> (And BTW gold is rising again in 2019, while there has been no QE policy in years in the US).
Actually they just got going again. A forward-looking analyst might reasonably guess that there is a lot of money about to hit the markets.
It's not an option in case of an inflation mechanism. If it was inflation, it wouldn't drop like this. That's the signature of speculation which is something totally different.
> Price was $15,000/kg in US dollars and is now cruising pretty easily above $40,000/kg US. You can sigh and pretend not to see it all you like but you are still ignoring pretty clear evidence of about 8% nominal growth/6% real growth in a shiny rock.
There is no gap on the graph, nor there is a 8% annual growth. But as you keep ignoring the shape of the curve and keep acting as if it didn't exist, I'm uninterested in pushing this discussion forward.
How do you get from $15,000 to $40,000 without annualised growth? I'm intrigued.
EDIT Just pointing out, the averaging I'm doing its reducing the relative inflationary impact of QE on asset prices because I'm including a lot of time to today where there was no QE.
With a 25% annual increase while no QE was running (2005-2008), a 75% annual increase with QE(2009-2012), a 0% increase with no-QE (2012) followed by a 30% drop when QE3 was launched! (sept 2012), then a little decline during the whole QE3 and which continued after QE3 was stopped (Q4 2014) until 2016, then again some fluctuation in an upward trend.
If you see a temporal correlation between QE and the price of gold, I can do nothing for you as you are blinded by your ideological convictions.
Good day.
This is a mistake that people almost always make with economics: failing to understand the decision contemporaneously.
By the metrics under which it was conceived, it had the intended effect (although some unfortunate side-effects...as ever).
I don't think that's a technicality at all, but rather the norm in an expanding economy. In such a case the supply of money must increase in order to maintain stable prices. More stuff to purchase requires more money to purchase it.
Inflation occurs when the supply of money increases faster than the amount of goods and services available for purchase, or if the money supply remains the same, but the goods and services available somehow decrease (for instance, after a lost war or natural disaster).
Deflation occurs when the supply of goods and services increases faster than the amount of money, or when the supply of money decreases with the goods and services remaining the same.
We've seen a lot of bad inflation in recent history, but it's not often appreciated that deflation can be equally ruinous. The Great Depression is an example of what you get if deflation gets out of hand. The prices for everything from stocks and bonds to apples and wheat plummeted, but it sure didn't lead to a consumer's paradise.
Because using actual events from history, it's true that printing money may not cause inflation.
When theory fails to describe reality, the failure is in the theory, not reality.
Our modern economies have a lot of latent capacity, especially since so much of our economy these days does not have a lot of raw materials involved. More Netflix subscribers don't use much more raw materials to serve them. We are not limited by things like oil and iron anymore, so we don't hit supply issues which cause inflation.
Consider the equation of exchange (https://en.wikipedia.org/wiki/Equation_of_exchange): MV = PQ.
The amount of money (M) can be increased without prices (P) going up so long as either the velocity (V) of money goes down or the economy (Q) becomes larger.
But it was so obviously intuitive for the layperson that it caught rapidly in the opinion, and now it's considered common sense.
[1]: https://fredblog.stlouisfed.org/2014/08/m2-velocity-and-infl...
One pointer would be the term "liquidity trap", e.g. this here as a starter: https://www.investopedia.com/terms/l/liquiditytrap.asp
Japan in particular had this problem for decades.
And I have to point out "printing money does not cause inflation" is exactly what happened in the US and Europe after 2007/8. There was massive QE but no increase in inflation (inflation was actually reduced).
Required for education: Unskilled labor "must" pay less to motivate people to get diplomas.
Required for productivity: Wages "must" be low enough so that people have to keep working.
Since motivation to get a diploma depends on the size of the income advantage "ideally" people without diplomas should barely be able to sustain themselves - forever.
All other economic talk seems filler material. All excessive wealth "should" go towards sustaining the filler material or otherwise be destroyed. For this purpose we also see endless investment in businesses that exist only for the purpose of extracting wealth from everyone else. Some of course deliver useful products in return but if they could increase ROI by not making anything most if not all would do it. If they operate at a loss it is even more "beneficial" to the system. For this purpose we also have 32 Trillion "hidden" in tax havens.
The whole thing seems to have "evolved" so that we all are as productive as possible only to sacrifice the produce on the altar of productivity again. The bad thing about this is that all this "productivity" destroys everything around us. It all costs finite resources. We would be better off just making what we need efficiently.
When I'm learning about a subject I find it much easier if I have a framework for categorizing and organizing the different approaches or topics that the subject consists of.
Velocity of money has a large impact on the inflationary impact of circulating money.
Bank loans endogenously produce new money in the economy. This can dramatically impact the inflation seen relative to Fed printing.
Official macro stats, especially inflation are tweaked to death and are not a stable metric.
...the point of economics is not to produce models that are 100% accurate. Yes, there is an absolute ton of witchcraft in economics and especially in macro (CGE, DGE to name two areas beloved by civil servants/central banks) but it is very far from useless (and, contrary to what the author thinks, there is a hell of a lot of testing of theories). The issue, funnily enough given the author's perspective, is often that we use economics to just support whatever we already believe.
On his actual content: unsurprisingly, he gets his history totally wrong.
First, an important point, the UK never actually adopted monetarism. We were forced to adopt DCE targets by the IMF in 1968 but everyone thought it was bullshit. Even after Thatcher crushed inflation, monetarism was only popular amongst the small group of City economics/journalists who came to the idea in the 1970s (and were thought of as crackpots by non-risk takers). The UK was thoroughly Keynesian, that is why we persisted with utterly insane policies through govts under both parties (until Thatcher).
Second, saying monetarism causes disaster confuses the cause and effect. Monetarism, whatever its theoretical faults, was correct in 1979 but was only necessary because Labour/Heath had fucked the economy beyond belief (the UK went to a three-day week because the economy literally just stopped working).
Third, the 1960/70s were not a period of economic success. Inflation hit 25%, two devaluations, one trip to the IMF, one banking crisis, and endless begging other people to lend money (and the govt got a reputation for going back on agreements). Incomes policy was, objectively, one of the most disastrous policies ever conceived. It ended up, literally, with unions running the economy in 1974. Yes, growth was high but real growth was lower and supported by population growth. I am not aware of any history which concludes any economic policy pursued in this period worked. Everything failed.
Fourth, what everyone forgets about the 1950/60s was that there was almost no trade. That is why workers were richer. Most currencies weren't convertible until the late 50s. The UK could milk Commonwealth nations dry with no competition. But the evidence here is clear: trade makes us richer. Anyone who says this isn't the case, even Trump recognises this, is an ignoramus.
Fifth, Greenspan understood there was a bubble. He gave a speech in 1998 saying there was a bubble. The issue - which is perfectly logical if you look at what happened in 1958 when the Fed did burst a bubble - is that people will say you caused the downturn if you intervene (he blames monetarism for causing the downturn but also blames the Fed for not bursting the bubble...what a genius this guy must be, spotting bubbles like he is at a car wash). This is an attempt to inject some psychology into economics, it is amazing the author doesn't see this.
It is no surprise Graeber has thrown his lot in with Corbyn. The number of crackpot acolytes around Corbyn grows every day (thankfully, he remains unpopular with voters). I would vote for Labour normally...but their current policies are just...ignorant. These ideas have been tried, they didn't work, that is why Corbyn has support amongst young people who don't read books. The logic is: build a wall, make Goldman Sachs pay for it.
Contrast that with this recent article
https://foreignpolicy.com/2019/10/22/economists-globalizatio...
I think what you really need to define is what "us" means
> The number of crackpot acolytes around Corbyn grows every day (thankfully, he remains unpopular with voters). I would vote for Labour normally...but their current policies are just...ignorant. These ideas have been tried, they didn't work, that is why Corbyn has support amongst young people who don't read books.
You've obviously taken all of this as an attack on your personal view of politics and its intersection with economics. However, instead of reflecting on why the economists that have associated themselves with Labour are criticizing your politic, you've taken to calling them crackpots. Robert Skidelsky certainly has the credentials to be taken seriously, regardless if you agree or not. Throwing out a few points that are _directly refuted_ by Skidelsky doesn't make for useful or productive criticism.
Together, this isn't the mark of an outsider. At best you're a 'useful idiot' in the Chomskyian sense, at worst you're the economist that supports violent austerity the article is criticizing.
Their argument goes
A) current economic regimes are built on shifting sand and border on useless for predicting macro crises (this is true more or less)
B) there are other schools of thought out there which are sometimes more predictive than the main stream
C) therefore get rid of economics
D) and replace it with a different version of economics, specifically one which agress with my politics.
The problem is that they are right, mainstream economics is junk, and so it becomes really hard to discredit other wacky ideas like mmt, or endless unmoderated fiscal stimulus because hey, couldn't be much worse than our system which seems to blow up and screw everyone over.
All of macroeconomics is really just politics though, so if you believe a particular political conception is more useful or valuable, of course you want economics to follow. It's a shame the author didn't cite more, but it also doesn't mean they're wrong.
The current set of economists are evolved Reagan-era republicans, which is certainly political, and one particular politic at that.
This is not really true, there's a science to it as well, but its not always well employed
I don't think this is the actual claim. The key quote is this (emphasis mine):
> Doubling the amount of gold in a country will have no effect on the price of cheese if you give all the gold to rich people and they just bury it in their yards, or use it to make gold-plated submarines
It's not that they're unrelated, it's that increasing the monetary supply is a necessary but not sufficient criterion for inflation to occur. I don't think the author would likely deny that printing boatloads of money resulted in inflation in Zimbabwe or Venezuela, just that if you increase the monetary supply specifically by giving it to rich people who hoard and it never gets spent on consumer goods, it won't affect the price of consumer goods. That's not how it went down in Venezuela, but is (the author asserts) what kept QE from working.
They might, actually, since the relationship between cause and effect isn't as simple as that. In both cases, the economy collapsed, causing massive inflation from the supply shock. The governments turned that into hyper-inflation by responding with printing money, but that was effect rather than cause. Even if they hadn't devalued their currency that way, they would still have been in a crisis.
The hyperinflation added an accounting crisis on top of that, but that's more about numbers than about the real problems. It's frequently presented as if the monetary policy were the cause of the crisis and they should just stop doing that, but it's simply not true. What they needed was to fix their specific national disasters -- destroying the farming infrastructure in Zimbabwe's case (after centuries of colonialism putting all of the farmland in the hands of an entrenched elite and race-based oppression of everybody else), and the collapse of the oil economy in Venezuela's (as well as mismanagement of their oil wealth leading up to it).
It doesn't need to be spent on consumer goods to cause inflation. It can also be spend on economic investment ie. new capital (new factories, new equipment, infrastructure inventory, supplies, training, R&D, real estate, mining operation etc. etc.). The money will quickly flow to employees and then to everything else.
Only if the rich keep all the new money in cash form would it not cause inflation but this would usually be a very risky and unstable situation for the money hoarders as some of the money on the sidelines can start moving at any time which would cause inflation to spike and the rest of the stockpile to lose value quickly.
Sure, I never said it was the rich people that had to do the spending, so we don't disagree there, but if "inflation" as commonly measured (CPI, say) is to occur, the prices of consumer goods have to change, and someone at some point has to buy some, whether it's the rich people or their employees, and if it's the latter it requires that the former sink their money into something that employs people. The author suggests that this happens less reliably than it used to (that they hoard cash, or I dunno, gold? whatever -- something societally unproductive)
"Falling unemployment no longer drives up wages. Printing money does not cause inflation."
This is not fair.
A) Wages are the last thing to rise and tend only to do so when unemployment is low. We're just now reaching that level.
B) Inflation doesn't well account for surpluses: we're getting a lot of bang for our buck in digital services, something that's super hard for the BLS to measure. 'Consumer Surpluses' are like 'profits' to the consumer that are not really measured at all - the only place we do this is when the BLS measures the 'quality' of a basket of goods to figure out inflation: i.e. if the Tomato is getting nicer, redder, juicier, then part of the increased cost of said tomato goes to value, the rest to inflation. This is hard enough to do already, but nary impossible with new services coming online.
Case and point: Fortnite. It's free. I've played quite a number of hours of that last year and never spent a dime. Apex is a big game, not free. This is a new trend. The surpluses there are vast. Games have a measurable effect on time spent on other things as well.
In a nutshell: consumers lives are improving in ways not always appreciated.
C) "Printing money does not cause inflation" - generally, it absolutely does! It just depends where you measure said inflation: stocks, housing - massive inflation. We just don't put that into our version of inflation. But there's inflation for sure!
Consider point 1 and 2 together: if stocks are doing well, and CEO's are getting their rewards for strong returns, why are they incented to innovate, pay more etc? Screw that - in a game of 'stocks going up because free money' - the strategy is to 'do nothing' - just keep operating as per, and avoid risk. 'Push the button, collect reward'. Risk changes the nature of the operating environment, and who wants that if there's steady 'returns'?
D) The Fed is not 'printing money' really, it's not quite fair to say that in the sense usually implied: a government (or anyone else) 'printing money' to pay for stuff has an entirely different implication.
I'll state the article misses the most important things:
1) Printing money almost assuredly does cause inflation, even now.
2) All things equal wages will rise as unemployment lowers. It's just that 'all things are not equal'. Take a look at real surpluses. Take a look at debt-leveraging in homes. Take a look at bifurction of employment from 'tech workers' to 'powerless gig economy' people. Take a look at levels of migrants, their relative skill and their relative market power for wages (they have little power, and there are enough that it absolutely moves the needle).
'Economics' can be used to measure and address all of those things, you just have to start looking at the data, and if not, start measuring things we didn't before.
My bet is the answers are not actually that far off, and probably not very surprising if we could see 'all the data' otherwise ignored or unmeasured.