Totally agree that the interest rate increases will negatively impact asset values as they already have.
It was worse in the 1970âs. Nixon imposed price controls and Canada imposed wage controls. Both actions failed and I at least donât see that happening again.
Regarding the money supply, we discovered nearly 200 years ago that prices and economic activity are influenced by the money supply. The gold standard didnât work. As soon as we have fiat money, we have govât control of the money supply.
Is âactual liberalismâ similar to a âtrue Scotchmanâ ?
Money supply has to scale with GDP, otherwise there will be inefficiencies as there wonât be enough money to facilitate transactions.
Not sure what this means in todayâs world as most money are digital nowadays.
I think you meant Scotsman. Anyway, liberalism does have a general definition, letâs use wikipedia:
Liberalism is a political and moral philosophy based on the rights of the individual, liberty, consent of the governed and equality before the law.[1][2][3]
Political philosopher John Gray identified the common strands in liberal thought as being individualist, egalitarian, meliorist and universalist. The individualist element avers the ethical primacy of the human being against the pressures of social collectivismâŚ
According to this definition, it would be tough to call yourself a liberal if you do not believe in individualism and instead promote collectivism like many Democrats today do. Is there some other tactic youâd like to use to debate the illiberalism of many modern âliberals?â Because it seems quite clear to me.
there is some greed-flation at play here. Companies taking this opportunity to jack up prices more than they need to. All hail Capitalism!
I was saying that this is not true.
I was not saying that Fed actions couldnât lower asset prices and cause investment declines. They certainly can, thatâs part of how they lower demand.
Nor was I advocating for taxes as a good method to control inflation. Tax laws are a blunt instrument that have significant built in delay. That said raising taxes while not raising government spending would lower demand. Its also something neither party is going to do.
Re: Liberalsim. There is a fundamental conflict with trying to achieve freedom and equality. Those two often collide. Your freedom to make money without government interference, will lead to less equality. More or less by definition.
So it depends whether you want to lean towards equality or lean towards freedom. Hard to achieve both.
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Equality? Or equity? I donât think thereâs much conflict between individualism and equality, otherwise liberalism would never have made much sense as a political philosophy. I think itâs correct to say there is conflict between individualism and equity.
I think your point is consistent with my contention that liberalism today is being conflated with something else, perhaps socialist-leaning, where individualism is replaced with collectivism and political egalitarianism (equality) is replaced with social egalitarianism (equity).
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People are treated equally. Not that everyone has equal assets and income and stupid ideas like that.
I understand. The conflict is clear enough when you consider how wealth impacts the elections. Neither one of us has the where with all to affect outcomes like Rebecca Mercer has. Her support is a whole lot more valued than ours. Itâs just the way it is. That is exactly the type of tyranny we have to guard against. A relatively small cluster of powerful families setting the rules for everyone. Tyranny is not restricted to Premiers, Presidents, and Prime Ministers. Back in the day, it was earls, counts, and princes.
You are facing a situation very similar to the colonies. They were governed by a set of rules designed to keep the elites in power (aristocracy). They had virtually no impact on the laws that were imposed on them. So too, are you now. Instead of an aristocracy, you face a handful of very wealthy and politically active individuals. Just relook at that tax reform and note how the âsavingsâ were distributed by wealth. Itâs not a very encouraging sign.
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Fine enough, but that is not Liberalism. The equality is with respect to inclusion as equals in the rule setting mechanism. That is very hard to balance against freedom. And both equality and freedom are abstract concepts, so pinning down metrics for them is a nightmare. Canât just balance them by making the âScoresâ the same. Where you might see any given question as basically about freedom, another community member may see it as an equality issue. Like guns. For people with no interest in owning a gun, itâs no skin off their nose to strictly regulate them.
Yep, that looked odd when I typed it, but my brain couldnât figure out why.
You want to say that âactual liberalsâ follow the thoughts of people who lived prior to the 20th century. Thatâs okay, I wonât argue about definitions.
EG has a couple good posts above on how how âequality before the lawâ and âgovernment by the governedâ need to deal with actual economic inequality.
The topic of my post, which was the governmentâs role in the money supply, was kind of on the fringes of thought in those days. I donât know if those thinkers ever addressed the notion of fiat money â whether they imagined the pros and cons and whether any of that really impacted stuff like free speech.
If we didnât have monopolies and oligopolies then those prices would be undercut by competition. So I wouldnât blame capitalism per se, more crony capitalism.
Is there really any other kind of capitalism?
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It doesnât have to be crony capitalism. Somewhere, there are people who own currently producing oil wells. Some production from other suppliers comes off the market, maybe about the same time there is a surprising increase in demand.
Oil well owners who arenât boxed in by contracts discover they can get a better price when they sell. Profits go up. The same holds for auto companies and auto dealers who discover they have contracts for chips or cars right at the time the demand for chips and cars accelerates and the supply of chips canât expand.
We can call them âgreedyâ or âamoral profit seekersâ. Either way, the additional profits they generate are one factor explaining inflation. And, at the same time, I canât think of anything the govât âshould do about thatâ. Itâs one of the tradeoffs we make when we decide to have a mostly private economy.
No. Profits are up BECAUSE of inflation, not the other way around.
I think we can agree on all these statements:
What is âinflationâ? It is a generalized increase in consumer prices. Who sets consumer prices? Businesses. Is someone holding a gun to executivesâ heads and telling them they have to raise prices? No, they make conscious decisions to raise prices. Why do they decide to increase prices? Because they want higher profits.
Why can they charge higher prices now than they could last year? Because something changed in the ratio between âmoney consumers are willing to spendâ and âsupply of consumer goodsâ. Profit seeking firms take advantage of the demand/supply change to increase profits. The mechanism they use is to raise prices. The BLS measures and weights those increases and reports âinflation numbersâ.
Just reviewed my property taxes on the county clerkâs website. It says my houseâs value increased 51.6% in the last year. Our state has a law that adjusts the tax rate so taxing entities are only able to get increased revenue from actual growth (new houses or new business that are built). If they want more they have to jump through a few hoops to âraiseâ their taxes. So most of the taxing entities rates go down by the average of the increase of their existing base. A few of my taxing entities are proposing increases and the actual total taxing rate went up 0.58%.
So my actual property tax bill went up 52.5% or $972. This is in addition to a 40% increase in water rates plus a 50% surcharge on water rates from July to Nov for severe drought along with an 11% increase in sewer rates and an 8% increase in garbage rates. Along with the fact the city started imposing sales (franchise) tax on communications and energy (cell phone, internet, electricity and natural gas).
So my local government bill has pretty much doubled this year. I wonder how that is captured in inflation. Might have to look that up.
and you betcha ass they ainât gonna lower it when the market crashes