What's actually causing inflation?

Oculus Spirit [97727]

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It's agenda-driven IMO

Feb 11, 2022, 9:37 AM

Almost stopped at this sentence, but kept reading....

the real reason for inflation: the increasing concentration of the American economy into the hands of a relative few corporate giants with the power to raise prices.

And yes, it's agenda driven and political. The reason we have inflation is because we long ago created more demand with cheap debt, than we could ever supply ourselves. We used foreign (cheaper) labor to deflate our currency for DECADES NOW. This deflation was offset by spending and cheap debt. Add to that illegal (cheaper) foreign imported labor (illegals), and you also deflate domestic labor prices. Again, offset by cheaper debt, more money to spend, kept in check only from cheaper external labor sources.

Covid broke our deflation mechanisms which for decades has allowed us to literally swim in debt and consumption. So the supply of cheaper labor vanishes, and the things we depend on vanish, and then the things working to deflate the dollar to allow our lavish lifestyle are taken, or decrease, and that leaves a demand that we can no longer meet. We do not stand on our own two feet economically, and haven't for some time now.

It's all a big scheme, that's been working for decades now. And as much as the author would hate to admit it, it's been BIPARTISAN. Republicans and democrats have both played along, because cheap debt means more spending, which means more vote-buying in Congress, and reelection. The GOP pushed and passed NAFTA. Gutted manufacturing and the middle class, but led to very cheap underwear imported from Guatemala. And we equate this with economic prosperity. Home builders can then sign a contract with cheap debt financing a home buyer, and build a house with underpaid foreign laborers, and build the buyer more house than they could otherwise afford, supplemented wherever possible by materials imported as well. Builder makes a higher profit, lender gets an asset they can then resell for a higher profit (MBS) to the fed, and home buyer gets more house, and illegal makes more money than they could make in Guatemala or wherever, and they send money back to Guatemala to pay for their mother's cancer drugs where she would have died without it.

Yeah, he's flat out wrong, and it's a political piece. I'm not buying it because ZERO republicans or democrats are saying what I just mentioned above, because they can't. The article is some early finger-pointing which will only get worse, and we are no less "informed" or educated by it. In reality, his original complaint/excuse, is actually an unavoidable byproduct of what I just outlined. It is an effect, not a cause.

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I think his points are more of a symptom than the actual cause, if that makes sense.

And I think there are predominantly three factors driving this, assuming no pandemic, and then an obvious factor that has to be considered given we had a pandemic.

1 - The amount of regulations in "staple" product type of market verticals (i.e. food, paper, fuel/energy, mfg) make it nearly impossible for more competition. There's simply too much red tape for smaller businesses to get going without massive funding.

2 - If there's a chance that a small business does make it, they're eventually bought out. I've bitched about this quite a bit, that the blueprint for growth in the modern global economy is to do so through M&A. This is very prevalent in the Tech sector - why invest in your own firm to do X when you can just buy a competitor that does X. T and CMCSA are also doing this by providing you internet, then owning the content providers.

I suggest reading a book called Makers & Takers. Phenomenal book that looks at the whole picture of how financialization has given us the economy we're witnessing today (and what this guy is bitching about).

3 - Financial policies favor those who can take on the most debt. The Fed is at fault for this by propping up the banks following the GFC, promoting MMT, and creating asset bubbles these bean counters are using as leverage to take on more debt. It's insane.

The Uniparty has left the Fed and Corporations unchecked for 30 years - what did anyone honestly expect?

The Covid 4 is both a Fed and Gov problem. The pandemic was a deflationary event (a recession). We prohibited that from happening by injecting trillions and trillions of dollars into the economy. This injection left the top line stagnant while the productivity and capacities of firms across the country took a massive dump. You can't have this scenario and not expect an inflation > stagflation scenario.

There were signs of trouble in the markets prior to Covid, so we were in some trouble before the virus got here. Which is a very interesting topic for another day.

Its odd they waited till Brandon got in office to kickstart

Did I NEED to disclose that?

So typical of reich. Of course there are situations where this

Re: What's actually causing inflation?

I stopped at Robert Reich

Robert Reich isn't tall enough to understand inflation.***

It's agenda-driven IMO

I think he's right....BUT

I left out another point

I'll also add, thanks to Citizen's United, none of this will

When I was responsible for selling large volumes

Oh yes, I'm sure that the creation of trillions of new $s

Think they are really missing the point

Re: What's actually causing inflation?

Robert Reich is a ####### liberal moron***

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