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Comment by ren_engineer | Hacker News Reader

economists are the dumbest creatures on earth, inflation is happening because the entire economy became less efficient for various reasons related to the pandemic and foreign policy, plus the money the Fed itself printed. Hence fewer goods being produced with more money available and increased prices as a result. These people think they can print money and adjust interest rates and make the economy magically do what they want when in reality the economy is driven by technological advancements that improve productivity, not financial trickery

these people don't live in the real world and now we are going to be stuck with stagflation for years most likely

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Jerome Powell has shown that he doesn't have the skill to be fed chair. Why would you drop rates prior to pandemic when the economy was doing well? Why were they overly aggressive when the pandemic hit? Take calculated actions and measure results. Some actions I don't even get like buying junk bond etfs.

Covid was deliberately hyped in order to increase monetary easing.. Wall Street controls everyone

I forgot that Jerome Powell was a clairvoyant who knew that the pandemic was coming. /s

What sort of dumb comment is this?

Increasing the available cash during boom times leads to inflation risk when you need to inject more cash into the economy during a downtime. While pandemic wasn't predictable and downturns do happen and should have been planned for.

Yes, and while less goods were being produced, the Fed simultaneously brought an obscene amount of new dollars existence, resulting in even greater inflation.

> economists are the dumbest creatures on earth, inflation is happening because the entire economy became less efficient for various reasons related to the pandemic and foreign policy, plus the money the Fed itself printed. Hence fewer goods being produced with more money available and increased prices as a result. These people think they can print money and adjust interest rates and make the economy magically do what they want when in reality the economy is driven by technological advancements that improve productivity, not financial trickery

Who do you think figured all this out? Surely not economists, the dumbest creatures on earth.

The real problem is that everyone, including economists themselves, pretends that economics is a real science with repeatable theoretical models, when in reality it’s still a social study that relies on several other budding areas of research and study; at least for now.

Another issue is that economist forecasts tend to be heavily influenced by politics.

citations needed.

China and other manufacturing behemoths are producing dramatically more than they were before the pandemic and we are importing and buying all of those foreign goods. https://fred.stlouisfed.org/graph/?g=117Ig

I don't know about where you live but I see a lot more automation in service industries where I live. We continue to innovate. There's a labor shortage and we are below the natural unemployment rate, and it's not that those workers are doing less, as real GDP continues to grow https://fred.stlouisfed.org/graph/?g=117IF

The inflation we've seen is almost all demand driven. There's plenty of supply of goods and services compared to pre pandemic. Your narrative doesn't fit the data.

On the other hand, Bridgewater's October 2021 analysis has been spot on. https://www.bridgewater.com/its-mostly-a-demand-shock-not-a-...

Everyone got their stimmy check, paid down their debt, quit commuting, and realized they could buy more stuff. They did that for a couple of years. Now that credit card balances are peaking again (and at higher rates!), demand will slow and there will be a recession. The fed, always looking in the crystal ball but mostly reacting to what's in the rearview, will ease off rates and the economy will level out. The fed can't get rid of business and credit cycles, but they can try to quiet the amplitude. They have blunt tools to do that. https://fred.stlouisfed.org/graph/?g=117MH

>economists are the dumbest creatures on earth

I don't think they're stupid, I think they say what they're paid to say via the old fashioned benefactor -> foundation -> employment bribery scheme.

economy might be driven by technological advancements, but inflation is certainly driven greatly by money supply and availability.

imho inflation is mostly psychological. In a steady state scenario when today's business is like yesterday's, people feel less inclined to put up their prices for social psychology reasons. When there's some sort of dislocation, they all of a sudden feel those factors are less important and more justified in putting up their prices. A pandemic is just an example of one kind of dislocation. It doesn't really matter the specifics of how the pandemic affected the economy -- that's just some noise on top of the signal that is all about "things are different now, so please accept my new increased pricing".

The same thing can be done in reverse: e.g. BigTech firing gazillions of people and suddenly "Ah, no we're not paying the kind of salaries that were common in the before times".

Over half of increased prices most people see are not inflation driven though... it's using it as cover to maximize prices, which can have good and bad points. In the end, it's a vicious cycle of a tail wagging the dog, then the dog eats the tail, then there's a bloody mess for everyone else to clean up.

Find “easy money” and you’ll find inflation. It’s really not rocket science.

Houses never lose value, let’s give those loans out to everyone - housing bubble. Heck, housing inflation goes back to the GI Bill.

Everyone should go to college - let’s give kids hundreds of thousands of dollars to spend at an institution of their naive choosing! Student loan “crisis”.

If I’m charging $1 for something and I know you have $5 to spend on it, the price is now $5.

I think money is psychological too. I still think $20 is a lot of money but some people think $50 is the new $20.

+ the apparent belief that it's ok that we bail out people who took the wrong bet (i.e. bought long-running treasury bonds and overvalued mortgage-packages AND the people who saw this and then crashed their own bank...) and now still want their returns, because they are special... Socialism for the 0.01% v2. First one was a smash.

Nobody is calling for bailing out the shareholders in SVB dude. Only depositors.

You're going after a strawman.

Well, I'd say everyone with more than 250k deposit didn't do their due diligence. And they might have asked the question, why the SVB-conditions were better than elsewhere. I would argue that's the idea of a free market, no?

I don't want to live in a world where I have to track down and personally inspect the factories and farms that produce my food.

If I deposit cash at a member bank that the government says is compliant with their rules and regulations, that should not imply any risk taking on my side.

If I use a payroll provider like rippling that uses SVB as their payment rails, I shouldn't have to worry about that.

If I use a service that goes under because they can't fund payroll because of a banking supply chain issue, that seems rather hard to due diligence.

If you honestly hold that position, I suggest you get a little bit of empathy for decision-makers. It will make you a better member of society.

https://twitter.com/chimeracoder/status/1635062000853331969 I don't want to live in that world either. I can imagine a society much better off with such individuals stripped from power.

And yes, to add insult to injury there is people offering the service of splitting up your cash between banks in a way which should give every startup enough leeway to "make payroll" for some months (https://twitter.com/ddayen/status/1634925784271036417)... It just doesn't work with monopolistic structures and you can't bankrun it, when you feel like it, so maybe not as en vogue with our hosts?

Economists are the equivalent of the Rock Star Coder. Think they know the right answer and push through a quick "solution" into the system, then they let other people clean up the mess.

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