Printing free money has consequences. This is entirely expected with that causation. It will get worse. Hold value in assets, not money. Property, precious metals, art, whatever isn’t cash until the money printing stops.
Yet the story we heard over and over from "experts" was that for some complicated theoretical reason exploding the money supply wouldn't cause inflation --- and then, after inflation became impossible to just ignore, that the inflation was due to complicated "supply chain hiccup" and would be "transitory". Whatever.
Common sense is a real thing that exists. Expertise doesn't make someone correct: it just makes him knowledgeable. An expert under pressure to arrive at a false conclusion (often for political reasons) will use that knowledge to bamboozle you.
The general public should think more critically and reflect on why they allowed motivated economic experts to tell them blatant (and not just in hindsight) lies about the consequences of running the money printer.
Pretty much all economics that you just casually hear about is going to be economics intentionally put in service of furthering the system of rich and powerful elites. It's just more propaganda pushed at you and has absolutely no relation to what is good for society, the average person, the longevity of our civilization, or the environment. It is, in short, sophisticated bullshit to let rich people keep getting richer and live like the leeches they are.
Knowledge matters and is important, otherwise we go down the path of novax and flat earth crowds.
The reality of not taking action has consequences. The opening of the money floodgates in the 80s blunted the pain of the late 60s and 70s. The war economy of 2002- likewise dulled the lows.
It makes it easy to outsource your own critical thinking by letting the "experts" do it.
The experts should just be one data point not THE SOURCE OF ULTIMATE TRUTH.
Pretty much the same goes for civil engineering, particle physics and any other highly trained field that requires vast quantities of knowledge to even intuit probable outcomes.
Why is economics any different? I don't believe it is, I would say economics falls into a similar bucket as weather science where there are always large unknowns that make broad predictions imprecise but that doesn't invalidate their expertise and ignoring it is definitely foolish.
Experts are experts for a reason. If you could intuit all difficult problems as a layman we would have already advanced science far beyond where we currently stand.
Plenty of people have found cures for their medical problems only after they kept doggedly pressing medical people for things that made sense and actually worked for them. Something didn't seem right to them, and they pulled and pulled at threads to find out what it was. You don't need a medical degree to do that: you just need a brain.
It's gravely concerning to see hostility directed at people who tell others to think for themselves, question experts, and adopt a general attitude of informed skepticism. Too many people get genuinely offended when you indicate that you're going to do your own thinking and not just follow "experts". They bring out cliches like "experts are experts for a reason" and "look at this one guy who did something stupid" and neglect, or even suppress, the idea that we at all, each and every one of us, scientists of our lives and competent to make our own decisions and form our own opinions.
In a vacuum, yes. Skepticism isn't just healthy, it's what powers science itself.
However this isn't a vacuum and most people that "question the experts" aren't doing so in good-faith.
Your ability to question an existing theory is proportional to your understanding the problem space itself and knowledge of the existing facts. Basically in order to question an expert realistically you need to be an expert yourself. This shouldn't be controversial, but for some reason it is. :/
There's a current trend with labeling people who disagree with your narrative as 'rejecting expertise'.
People aren't rejecting expertise. They're following different experts than the one's you approve of.
Descarte's, maybe you've heard of him, rejected the expertise that the sun revolved around the Earth despite all of the mainstream experts disagreement.
This pattern has repeated countless times throughout history: labotomies, thalidomide, antiseptic procedure...that's just science...god knows the number of people executed for going against the expertise backed narrative that a dictatorship is not an ideal form of government.
The problem with 'trusting experts' (which is a classic logical fallacy)...is WHICH EXPERTS?
At the end of the day it's all a narrative and you pick the narrative you wish to follow backed by the experts that support your narrative.
It's disengenous to claim otherwise.
And that's literally a politician or leaders job is to sift through all of the experts and all of the other bullshit and try to pull a good decision out of it.
And as a human being, that should be your job as well.
This trend of blind trust has been extremely alarming to me as well these days!
Lobotomies won the Nobel prize in the early 20th century championed by experts!
Experts aren't immune to agendas, or corruption, or any of the human vices.
Appeal to authority is a literal logical fallacy but it's lost on people.
Scary world we're in.
People are scared. When a smooth, soothing voice on YouTube tells these scared people that it's all going to be all right if they just follow recommendations A, B, and C from the "experts", these people feel soothed and safe, like a crying baby being swaddled and given a pacifier.
These people perceive criticism of these soothing experts as personal attacks on their safety and react accordingly. "How DARE you attack the people who made me feel safe after I was scared?!"
Scientific progress depends on consciously overriding these ancient impulses, and we've done a terrible job of communicating this idea to the next generation.
It helps deal with the fear of the unknown.
I guess one step in growing up is realizing nothing is good and also nothing is bad, it's all subjective...the world is essentially a thin veneer of civilization on top of total chaos.
EDIT: Add on also that economics is one of the few fields where what you learn changes the field itself. Gravity didn't start working differently because Newton figured out the laws of gravitation. But if one economic theory holds up in a particular economic cycle, people will adjust their behavior so that it doesn't work anymore. In that way, it's really like psychohistory.
Sure. Not everyone in every field is smart but experts are a real thing and they know vastly more about their field than you do.
I think when you achieve mastery in some field then it becomes a lot easier to appreciate this.
Maybe that is part of the problem. The vast majority of people aren't being offered the opportunity to achieve mastery and thus they don't have this critical grounding.
It's Dunning Kruger otherwise.
But in the last 12 month energy prices have jumped 25% in the US. That's going to have both a direct and indirect impact on CPI inflation.
There is still likely to be some underlying inflation, not attributable to energy prices, but it's only going to be a couple of percent.
Now if your argument is that the energy price rise is a direct consequence of QE, I don't see the link. And it would need to explain why energy prices have gone ballistic everywhere else too. But there may be a link I'm not aware of.
While all kinds of inflation have the same symptoms, it's not true that all kinds inflation has the same causes. And also the cure, it should be the right cure.
Printing less money right now would be a huge mistake. But central bankers knows his very well.
Or in other words, if I have multiple properties, stocks, investements etc, inflation is good for me because those things increase in value; however if the primary source of capital I have is a paycheck I get each week that I then have to immediately spend on housing, food, groceries, gas etc, inflation hurts me because my boss isn't going to raise my pay, meanwhile everything has gotten more expensive in the meantime, and if my boss does eventually give me a COL increase that will have lagged to the point the rest of the economy has already caught up with it.
Pretending that inflation is good for debtors is like pretending that economically speaking we are all spherical cows in an airless frictionless vacuum.
It's workers who benefit the most from a fluid and tight labor market. Asset holders only get a transient, on-paper gain that is much less important than a functional labor market is to workers. In a good labor market, businesses are fighting to retain and attract labor.
And to be quit honest, the elephant in the room that no one wants to address is that low and middle income people leaving their jobs for better ones are a contributor of the inflation we are seeing. The USA built an economy around cheap goods produced through exploitation both abroad and domestically. And these people are finally realizing that they can do better.
The government cut off the inflow of immigrants who would replace these people in dangerous, low paying factory jobs, like meat packing.
Those millions of lost immigrants are enough to make a solid dent in the labor shortage we are currently seeing.
Oh wow.
Krugman, leave that body!
The fed has been "helicoptering" money for years, but it has only been this year, when there have been real and substantial breakdowns in the supply chain and labor markets, than inflation spiked so much.
Was the same with OPEC in the 70s, Zimbabwe, Weimar Germany - in all those cases there was a major destruction or restriction of supply capacity, not just money printing.
In 2009 inflation actually collapsed for example and that was a supply side collapse far bigger then this year.
> The fed has been "helicoptering" money for years
They have also enacted major counter measures and the pure amount is no longer really a good description of policy. Around 2009 or 2010 they started paying interest on reserves. The CB has a number of tools.
Remember, the Fed is buying $120,000,000,000 of bonds per month.
That’s well beyond a helicopter’s capability!
This is part of the complexity in modern central banking that people don't seem to understand. Many of the things you might have learn in school about how central banks operate are no longer the case.
If cash actually flows depends on many factors.