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Comment by iammisc | Hacker News Reader

More importantly than this, we need to discuss why major news outlets were parroting government propaganda that shortages and inflation were transitory, when they were obviously not. Major news outlets claimed that 'new economics' would mean that the expected inflation and shortages would not come to pass. Instead of critically questioning government official's proclamations of a new economics, outlets gladly parroted this position. This is a far cry from the critical reporting of the 2016-2020 years.

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> need to discuss why major news outlets were parroting government propaganda that shortages and inflation were transitory

Because announcing there will be shortages is guaranteed to produce shortages.

I used to buy a sum total of six rolls of TP in 2019 (I use a bidet, so this is mainly for guests).

Right now I have a box of 24 in the house with two used all through 2020 + 2021 (no guests, that's why).

So that's 22+ rolls which I have taken off the market without utility, which is because the week I went looking for TP it wasn't there and you could order in bulk instead.

They pulled the lever on the trolley problem, therefore it is their fault, but not pulling is also a choice with damage.

> They pulled the lever on the trolley problem, therefore it is their fault, but not pulling is also a choice with damage.

Ruining institutional trust by patronizing and lying seems like much worse long-term damage than toughing out a TP shortage.

Companies are in love with JIT, so they don't warehouse many products. When disruptions in the supply chain happen it's then up to the customers to do their warehousing for them.

There's a tax on inventory in warehouses. The government wants JIT too

Most states don't tax inventory.

https://taxfoundation.org/state-business-inventory-tax-2021/

Cool, never knew this having only worked in Texas. Both "phone maker" and "online retailer" had year-end efforts to reduce warehouse value before we took inventory. For retail it kind of works out okayish because it coincides with the holiday season, but for less elastic demand it puts an extra burden. I remember things like shifting inventory to a customer to have it returned after inventory.

> I remember things like shifting inventory to a customer to have it returned after inventory.

This seems like something that would have been obvious to outlaw when drafting the legislation for the tax.

Announcing "There will not be shortages" is equivalent to announcing "There will be shortages". The choice is more whether to call attention to the issue or not.

I don't think that misleading people for their own good is the news media's job. Some government officials may believe that it is theirs in certain situations, but I'm of the opinion that transparency is almost always the best policy in the long run.

Random aside - how do you dry off after using the bidet?

I usually sequence it into the shower after that in my schedule (this is what I did in India growing up).

My partner uses the air-dryer that is in the bidet (~2018 Brondell Swash), but there's a bit of that feels very unhygienic to me & I'd rather just soap up right after.

You use toilet paper, you'll just need way way less of it.

Some have heaters that blow dry air.

You can also use washable towels to pat dry.

What in the article makes you think that the shortages are not transitory? Maybe the shortage period will be longer than originally expected, but that doesn't mean they were wrong.

And WTF is this "new economics" bit? I never heard anything about that, either from government or non-fringe media sources. Links, please.

Of course they’re transitory give a loose enough definition of transitory.

Most of the supply chain experts are predicting that it will be years before this is unwound. Years.

> And WTF is this "new economics" bit?

It's talked about quite often and it's most significantly the idea that government doesn't have to worry about spending money it doesn't have. The formal form is usually called Modern Monetary Theory.

And which government departments or beaurocrats have adopted it?

I don't remember anyone talking about "new economics", I remember people speculating inflation was due to supply chain disruptions due to the pandemic, and that would be short lived.

I still disagree with that theory, clearly giving everyone more money is going to raise prices, but it's not quite as ridiculous as you make it sound.

>"I don't remember anyone talking about "new economics""

Lots of people have been talking about how modern monetary theory (MMT) means that the USA can 'print money' (increase the money supply) without fear of inflation.

That's just a strawman. MMT just means that the government runs its own bank and will never run out of money. Regarding inflation, with MMT you can buy anything that the economy can produce, that's it.

What are the side effects when you "buy anything that the economy can produce"?

> that's it.

That can't possible be it. There must be some consequence to increasing the supply of money. I don't admit to knowing what that consequence is but there is no way the story is, "we make more money. the end"

> There must be some consequence to increasing the supply of money.

MMT holds to the orthodox monetary view that inflation/deflation result from expansion/contraction of money supply relative to output. MMT, despite its name, is quite orthodox in monetary theory.

Where it is (somewhat, though most orthodox voices I think would concede this point if cornered and unable to talk around the question) unorthodox in description is in theory of government finance, as it holds that fiscal constraints are a fiction (for a government operating in its own fiat), and that the only real constraints on government spending and its relation to taxes are not fiscal limitations of a finite purse but the monetary effects of money creation by spending and money destruction by extraction via taxes, etc.

But the real conflict between MMT practitioners and orthodox economics doesn't even seem to be on the empirical, descriptive elements of economic theory, but prescriptive/normative elements of policy recommendations made by adherents to the theory.

MMT does not say that you can't cause inflation by increasing money supply.

It does say that the government that controls the currency (monetary sovereignty) never has to default.

I think people may be mixing up the increasing popularity of MMT with the idea that we have been "pumping money into the economy" for years without the official measures of inflation ticking up much, at least until very recently.

I don't think the average person buying cars, trying to rent/buy housing, or send their kids to college would agree with the official narrative of low inflation however.

I understand MMT is the increase in money supply is accompanied by an increase in taxation and by taking the money back out of the economy slows inflation.

I think the caveat is that politicians can supply money into the economy (increase their chances of re-election), but will be reluctant to raise taxes in an effective way (to not decrease their chances of reelection).

Unless the government burns or locks away the money it taxes - in which case all effects of MMT are muted - it is going to just lead to inflation from government expenditures. There is no way to escape the price impact of increasing the money supply, as prices are always set by supply and demand.

MMT is one of those persuasions that can only exist in America, same as Libertarianism on the other political end.

In any non-American 'monetary sovereign' country, printing too much money will crash the exchange rates (this is not merely a consequence of inflation - some of the processes involved are independent). It's a slightly different casual mechanism than the neoclassical one, but still the result is a de facto government default.

The USA however holds the world's reserve currency, and the normal restraints indeed don't apply anywhere as much. This however does not mean there are no restraints. Fortunately the country has never gone full MMT, so we'll never find out empirically.

yes, the consequence is; those who are more easily able to accumulate the money, will still hoard and stash all the excess.

Yes, I've read many articles on MMT and about the supposed ability to print interminably and never cause inflation. That is what I was referring to by 'new economics'. I've read a few articles that even admit such a thing has never occurred before but this time it's different (TM).

Mind elaborating on who "lots of people" are?

Well, in many cases they were transitory. You may remember, for example, big stories about a lumber shortage from earlier in the year, until the shortage spontaneously resolved itself in July.

It spontaneously resolved as people chose to not do projects.

Feel free to lay out the entire supply chain and the numbers that support your hypothesis.

Why is it that only those making my argument must go into great detail, but those pretending you can print endlessly with no inflation do not?

You don’t have to write a dissertation about it, but if your response to prices going down after they went up is to speculate about why the downswing might be fake, I think you have to seriously consider whether your position is falsifiable. Is there any evidence that, if found, would convince you the lumber shortage was in fact transitory?

> More importantly than this, we need to discuss why major news outlets were parroting government propaganda that shortages and inflation were transitory, when they were obviously not.

Because the inflation being referred to being transitory was from the central bank's monetary policy, but the inflation we're seeing for many things is from supply-side constraints. The why of a thing happening can be just as important, if not more so, than the what happened.

People were expecting demand-pull inflation ("too much" economic activity), but we we're probably seeing is the cost-push variety:

* https://en.wikipedia.org/wiki/Inflation#Keynesian_view

See for example Shipping being >4 times higher than the base line of January 2019:

* https://www.oecd.org/economic-outlook#GDP-growth-projections...

The same thing can have multiple causes, some of which many be more easily predicted and/or modelled.

Also, this begs the question for what is considered "transitory": 3 months? 6? 12? Other?

The fact of the matter was that inflation was expected because of the spending surge, but that 'transitory' meant that it would be 12-18 months, some using the spending of the Korean War (as compared to the Vietnam War spending):

> The Korean War started when North Korea invaded South Korea in June 1950 and ended with an armistice in mid-1953. As displayed in the following figure, US inflation soared in late 1950 but returned to around 2 percent in 1952 and 1 percent in 1953.[3]

* https://www.piie.com/blogs/realtime-economic-issues-watch/in...

* https://www.nytimes.com/2021/02/07/opinion/covid-biden-econo...

>parroting government propaganda that shortages and inflation were transitory

Are you claiming these shortages are permanent? I see no evidence of that, since already things which were scarce or costly have returned (wood, toilet paper, etc.).

It's still more likely these shortages will subside as workers return (a decent amount of the shortages are Delta shutting down production lines).

Nothing is permanent. I am claiming they will be with us for a long while. Transitory means like a few weeks or months. Not close to a year.

Things that were short but are not now, a few months after they became short:

PPE, toilet paper, hand sanitizer, lumber, cleaning supplies, canned goods, $100 bills, jigsaw puzzles, baking yeast, Nintendo Switch, pool chlorine, condoms.....

And a lot of these things were never actually short - just that panicking people hoarded them.

Another set were caused by lower COVID demand meant manufacturers didn't place traditional orders, and now that demand is back, they're sitting in lines getting orders filled.

All of these things and more faced shortages, yet bounced back.

Okay. Here are more important things that were short then, and are still short:

1. Computer chips, and things that depend on them like cars 2. Labor 3. Groceries (have you seen the stores?)

You are talking about trivial items, like baking yeast and jigsaw puzzles, and I'm talking about far-reaching systemic issues, like labor and food.

Labor is people choosing not to work, because they have better options. That is a plus for people, right? As aid turns off or slows down, I'd expect them to return to work. That shortage is not long term (it has not been short even a year) and is not systemic.

If you're claiming food shortages are systemic, then you're using the word wrong. There is no fundamental breakdown in food that will last forever. Delta is shutting down some factories and lines. And there is not a food shortage - there are temporary shortages on some items, and those items rotate in and out. I don't think I've seen a good there yet that is simply gone for months and months.

Yes, I have been to the grocery store. The vast majority of food items are still there. When something I want is not on a shelf, I ask, and they say it comes in a few days, so I go back and get it.

Ripples on rotating products, when the vast majority are still available, is not what I'd call a "food shortage," unless I simply wanted to be hyperbolic.

From how many angles do you want to check your claim?

More evidence? If there were large scale shortages, companies selling food should lose noticeable revenue, and you can check their stock prices and revenue statements, and you'll find they are increasing, not decreasing.

Chips also are only short for very few categories - I order stuff from Digikey and Mouse nearly every week, and have only hit one chip that not in stock, but it's also a new chip (ESP32-S3). And today, lo and behold, I got some from Digikey. It's the first time I have seen them for sale anywhere.

So there's evidence for you that even new chips are popping up.

Consumer electronics use about half the world chip supply. Go to a Best Buy and see how many consumer electronic products are still there, and how many are not. Very, very few items are missing. Things that are out are things that were new as COVID hit - new Xbox, PS5, some GPUs (although I have bought 3 3090s during the "chip shortage"), Switches were short (bought 2 - the handheld and TV versions). But not much else I have looked for requiring chips have been short.

Cars use about 3000-4000 chips, and any one missing stops a car. I guess that's what make you think there is a much bigger chip shortage overall.

There's a tiny few chips that are short. And it's not systemic.

So, care to estimate what percentage of chips are not available? What percentage of groceries are not available? It is demonstrable that the labor force participation went from ~63% before COVID, to 60.2% at the lowest in COVID, back up to 61.7% [1]. That sure doesn't seem like there a massive labor drop. I'd guess it climbs back up once Delta is more under control.

[1] https://fred.stlouisfed.org/series/CIVPART

"...were parroting government propaganda that shortages and inflation were transitory, when they were obviously not."

If this was obviously the case then why didn't you make a ridiculous amount of money speculating in the stock market or other markets?

I did?

Not just mainstream media - the most upvoted comments on HN were those "debunking" inflation by claiming it was transitory, baseline etc

Let me "parrot" other commenters and say that I've never even heard of this "new economics" you're talking about, and I check mainstream news pretty regularly, so I'm not sure what you are talking about.

Also, let's be fair, most of the "critical reporting" under Trump was not "The administration forecasts x% economic growth, but experts disagree" variety, it was more like "Wait, did the president just tell people to drink bleach, or was it supposed to be a joke, in which case which part was a joke and which wasn't?" variety.

> Also, let's be fair, most of the "critical reporting" under Trump was not "The administration forecasts x% economic growth, but experts disagree" variety, it was more like "Wait, did the president just tell people to drink bleach, or was it supposed to be a joke, in which case which part was a joke and which wasn't?" variety.

Nonsense. Certainly, the outrageous statement you mentioned was critiqued, but relatively mundane ones were too, such as the president's prediction of vaccines before the end of 2020 (correct), the president's desire for low interest rates, the president's desire for tariffs, the president's desire to end wars, etc.

Many many articles were written directly critiquing boring parts of Trump's economic policies.

Here's a 'fact check' from the New York Times when Trump announced he wanted lower interest rates:

https://www.nytimes.com/2019/07/19/business/economy/trump-in...

For example, here is Trump's statement:

> Because of the faulty thought process we have going for us at the Federal Reserve, we pay much higher interest rates than countries that are no match for us economically. In other words, our interest costs are much higher than other countries, when they should be lower. Correct!

There is only one 'fact' mentioned here, which is that our interest rates are higher than other countries. The times admits this is true. It says:

> It is true that the Federal Reserve has raised interest rates nine times since 2015, leaving the federal funds rate, its main policy tool, at 2.25 to 2.5 percent. That is, indeed, far higher than rates in advanced economies, including the eurozone and Japan, where some policy rates remain in negative territory.

It then goes on to 'fact check' the opinion based parts, and instead of disputing fact, it excuses the feds actions.

Can you find me a NYT 'fact check' for the Biden's administrations claims the inflation is transitory? Of course not, because for a democratic president, the NYT extends the privilege of not fact checking one's opinions

> This is a far cry from the critical reporting of the 2016-2020 years.

You almost answer your own question, but mistake cause & effect.

They weren't reporting critically, it just happened that their preferred (leftwing) political option was out of power. They were lying against Trump / for Democrats, just like they're now lying for Biden. The only difference is, who's in power.

I agree with you... that's why I said that my friend. I understand completely that they were lying against Trump. I'm trying to get others to see that. They cover for the democrats (fiery but mostly peaceful protests... lol, what are people smoking these days)...

Agree, this mob or any kind of collective mentality and thinking they are speaking for everyone when they are not and actually have a nihilist agenda is tiring.

>More importantly than this, we need to discuss why major news outlets were parroting government propaganda that shortages and inflation were transitory, when they were obviously not.

Because that's what they do. They define reality.

When it comes time to convince people that the shortages and inflation are normal and will always be there (and were always there in a "we've always been at war with Eurasia") way, they'll do just that.

>This is a far cry from the critical reporting of the 2016-2020 years.

2016-2020 didn't have critical reporting either. It had hysterical partisan crap, with a big bias against Trump with ridiculous stories proped up to inifinity because it made good bucks (and because Trump was championed by middle/working class/flyover state people - basically everything esteemed and hip journalists, academics, and pundits on the upper middle class - or aspiring to be there - despise).

The same partisan bias proped up Biden (a long-time lame "professional politician", forever an insignificant mediocrity, and now barely functional due to age, that was touted as some kind of political messiah by the media).

If people believe in it, it will happen, economics is whatever the people want it to be.

Somehow that doesn't square with the realities of resource extraction and manufacturing.

Most of modern development doesn't square with the realities of resource extraction and manufacturing long term either.

It just had a lucky run with discovering hundreds of millions of years of stored fossil fuels to propel its development.

Populism is a political ideology which pits working class and low income common folks against the ultra wealthy and ultra powerful.

The people who own these news networks are literally the people that populists position themselves against.

The campaigns against populists (Ron Paul, Bernie Sanders) are usually successful. In the case of Trump, they weren’t. I think what we are seeing now, where the news has basically just given up and semblance of even trying to be an indicator of true things which are happening in the world, is that elites are trying to course correct.

Like it or not 2019 was the best year that the working class and low income have had in the US for a very long time. Real wage growth was record high, unemployment was record low. It was an incredible time (if you don’t see this: please try to diversify your fried groups. The people in the country who usually get forgotten about we’re happy and hopeful in a way they haven’t been in a long time).

So why are the news people lying? Because they want people to forget that, and they really need to be right about their idea that electing an elderly, senile, corrupt, career politician is the solution. So they just lie about it.

Edit: when you guys downvote this can you please just give at least some kind of explanation? I really wish some of you could have seen the level of hope that the poor and working class had for the first time in a LONG time, and what this lying and gaslighting has done to them. It’s horrible.

I think you could prove this by following the money. I suspect that none of the major news organizations make the majority of their cash flows from advertising. I would suspect that they are operated at huge losses or increasing debt funded by their ‘shadow customers’. My cursory search was unable to produce any transparent financials. Maybe somebody else can do better.

The big problem is media is greatly funded by clicks, which leads to picking a demographic and pandering to it.

Hence AT&T owning CNN & then coming up with the idea for a network like OAN to cater to a different demographic.

That seems extremely unlikely. They’re funded by advertisers.

Okay then why are they all going broke and being bought by huge conglomerates?

Operating at a loss is the same thing as being funded by someone else.

> Like it or not 2019 was the best year that the working class and low income have had in the US for a very long time. Real wage growth was record high, unemployment was record low. It was an incredible time (if you don’t see this: please try to diversify your fried groups. The people in the country who usually get forgotten about we’re happy and hopeful in a way they haven’t been in a long time).

You responded to me, but I 100% agree with you!

I remember in Marin county, my gym had hired a guy with down syndrome because they didn't have enough employees -- unemployment was so low. My local safeway had resorted to hiring extremely disabled people to help with checkout. There was at least one paralyzed lady doing checkout and a guy without hands as well. For those individuals, such an opportunity would be very difficult to come by (I know ADA exists.. but let's be honest).

> So why are the news people lying? Because they want people to forget that, and they really need to be right about their idea that electing an elderly, senile, corrupt, career politician is the solution. So they just lie about it.

Absolutely. If we saw sustained real wage growth the way we were beginning to see with Trump, people wouldn't have to rely on debt to finance their lives, which would mean a reduction of asset opportunities for the upper class. They couldn't stand that.

> Populism is a political ideology which pits working class and low income common folks against the ultra wealthy and ultra powerful.

No it's not. It's a system whereby the powerful tell working class and low income common folk to be angry at things like immigrants, minorities, other countries, etc. so their anger goes elsewhere. A more modern alternate form involves convincing people to be angry at things that don't exist, like Satanic pedophiles harvesting adrenochrome or 5G chips in vaccines, so people expend their limited energy fighting windmills and diving down rabbit holes that lead nowhere.

Here's a good rule of thumb: if you are angry at someone about a condition such as high costs or unemployment, ask yourself if the people you are angry at have the power to act as decision makers in control of any of the decisions that led to that condition. If the answer is "no" you are angry at the wrong people.

That's not populism because it involves thinking, and populism is mindless.

Last I checked, populists don't care about anyone's race. They care about the rich and powerful aiding and abetting illegal immigration, because that increases labor supply and lowers the wage floor.

Hmm, but the news channels owned by the ultra wealthy, who get their advertising revenue from the ultra wealthy, and who are staffed by the ultra wealthy, all told me that those poor people who are upset about illegal immigration are a bunch of racists who are too stupid to understand labor economics.

Theory: most of the Facebook Hate in the media right now is largely due to it being one of the main critical outlets against said media and those who align with its preferred point of view. It is the everyman’s antidote against them.

If the dominant viewpoint on FB was the opposite viewpoint a la every other social media outlet, we most likely wouldn’t be having these discussions about FB right now, or at least not anywhere near this degree.

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