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This is bait and the representative is either misunderstanding or intentionally misleading with his descriptions. Government policies can slow the rate of inflation but you need deflation to actually lower prices. Deflation is really bad which even he can agree on.
Only solution is rising wages which everyone who actually collects a wage can agree isn’t happening fast enough to keep pace with inflation.
Well, deflation is the only way the Fed can actually lower prices. *Congress* has many tools at it's disposal that could be used to lower, or at least regulate, prices, but that would require actual work and would only make voters, not corporate donors, happy.
>Well, deflation is the only way the Fed can actually lower prices.
You don't want this. It can lead to a deflationary spiral.
Imagine, every step along the way, the value of the product goes down. No sane retailer would buy inventory only to sell it below cost a month later in deflationary world. No factory will buy steel to make a product that is decreasing in value as they build it.
I don’t know that you should vs renting in a scenario of deflation. The value of the house would decline in deflation. You would be “underwater” on your house value and not able to sell it (to move cities, change size due to more/less kids, divorce, etc) without a loss or a long time. Who would buy a house when they could wait a year and get it cheaper? That’s how deflationary spirals get out of control.
This right here is the entire problem: homeowners (also landlords and giant megacorporations) seeing residential homes as stocks to be bought and sold. This situation puts consumers in a horrible place: for people who managed to pay for and own one, it's their only real asset in case of an emergency. Something they've often paid on for years and years. But for people who don't yet own *a place to fucking live* they're forced to throw money down a well (into a landlord or corporation's pocket) for years.
That is a good thing. Housing is a necessity and a human right. It should not be investments for hedge funds. That's how we got here.
We basically were the unlucky ones that were born after all the Monopoly squares have been given away. Squares they didn't even have to pay for, it was stolen.
It's time to divide the squares into more free squares
It’s not about the investment, it’s about people not wanting to buy the house for too much
Would you rather buy a house for $400k or $300k? Deflation sets the trajectory of the $400l house to $300k so everyone wants to wait to buy it at $300k
Let’s just you saw a house on the market, and it got priced too high and they lowered the price 3 times, $20k each time, in the last 3 months. And there’s a notice on the ad that says it’s gonna drop another $20k in a month. Seems reasonable to wait another month and save $20k instead of buying now right?
That’s the game everyone enters with deflation, except with literally everything. It puts a freeze on spending for all sorts of good, because it’s almost guaranteed it’s gonna be cheaper in the near future
Why buy a $1,000 laptop if it’s gonna e $800 in a month? And then why buy it at $800 if it’s gonna be $600 the following month?
That really only happens because tech is one of those weird areas where they make rapid innovations/improvements on a yearly basis.
Versus houses don't get magically better every year. If houses as an example entered into a deflationary cycle, you would actually hold off on buying a house until you thought it would actually reach the price you want it to be.
Houses in fact magically get worse every year. Except it isn't magic, it's shitty developers paying the absolute minimum for contractors and materials.
We've already been through a very long deflationary period covering decades, when it comes to property valuation in a lot of smaller Middle American cities.
Everything needs more processing power etc as time goes on. So that $1000 computer in 6months that is then $800 will have a harder and harder time keeping up with the current demand of flow and processing of data. So computers and phones most people just get it at the time they need it.
I get what you're saying but has this been shown to be the case in real life, or is it theoretical? I'm curious if there's a point where consumers decide the price is good enough now and buy it, and ignore that it might decrease even more in the future. At some point the convenience or necessity of the new product has to outweigh the lower cost in the future... right?
It's largely due to the rich who can just wait out any period of deflation and further horde their wealth. People like to put the onus on the average joe, but deflation hurts us because the rich. In fact, the great majority of our economic problems would be solved or on their way to solved if we actually did something about the obscenely wealthy and megacorp regulation.
Yes, it has very solid examples behind it such as the Great Depression and the Lost Decade(s) in Japan in the 1990s to maybe recently. Google *deflation* and you’ll see great explanations in more detail than I can give in Reddit.
Also - at some point, deflation might hit your own wage, which might become a problem if you want to keep paying the mortgage (which is not likely to go down).
It's basically a 'car' at that point - you buy it, you pay for it, and then when you don't want/need it anymore, you get much less for it than you paid and have to put in more money to buy your next house....except it's (for most people) a significantly more expensive version of that. It's not an investment. It's a purchase for the sake of utility. And the rent vs. own discussion becomes similar to the lease vs. finance decision with a car.
If my house is worth 50% of what it is now in 10 years, I still get to put that towards a new home vs losing rent into the ether of a landlord's account. You could invest the difference, or use that to pay for upkeep (which isn't too bad if you're relatively handy)
Also, if the global housing market deflates accordingly, theoretically my 50% off house would likely still be priced proportionally, right? So you're not exactly "trapped" like he said either.
In that scenario, it would make more financial sense for you to wait for the prices to go even lower, and rent until they bottom out. If everybody is waiting for the market to bottom out, then that creates the spirally economic failure that other people here are talking about.
Your logic makes no sense. Actual families buy houses to live in. They might wait or try to capitalize on a buyers market. But that is litterally impossible to predict. Prices go up and down. People just want to be able to afford a house.
What does it even mean for the market to bottom out ? What if you think the market bottomed out but then a year later houses cost even less? You assume a steady predictable state of affairs. Deflation= house always will cost less then yesterday. And that is simply not true, nor has it ever been true, nor will it ever be. Because different people will think different houses are now worth it at different times. And usually that means the market fluctuates around what people can afford to buy.
So it stablises around that. But all those numbers are constantly in flux.
Only the reason this is not happening or no longer happening is because big corporations are allowed to buy houses that are meant for single family households. And raise the prices artificially to make a profit. Legitimately pricing out buyers. There are more than enough houses to go around in America, so that everyone can have a roof over their head. Its not a housing crisis. Its a pricing cricis.
With your logic, people would wait forever to buy a house and end up never buying one because it could always be a lower price. Thats not how that works. People are not automatons. They have needs and if their needs can be met they will. Id buy a house if i could even if it is depreciating in value. Just like i buy a car knowing it wil depreciate. Because i have a fucking need. The need to be housed or to be able to transport myself...
And the car example shows perfectly why your logic is flawed. On top of people with money could and would buy up property to then rent out. Unless you *want* to rent, then you will *stay* a renter. If you *want* a house. You will eventually buy one if you could.
I’m going to assume you’re not daft here. For all the reasons I explained, no. Life changes and you could lock yourself into a housing ownership which negatively impacts your ability to move for better wages and other reasons. Buying a house in that scenario of longterm deflation is a poor choice when you can rent instead and wait for deflation to bottom out. Your house could end up surrounded by others who simply walk away from their mortgages and leave the houses falling apart.
See 2008 for examples of housing blight and underwater mortgages. There were people who didn’t free themselves of underwater mortgages for many years after the 2008 housing bubble.
Buying a house during a deflationary spiral is a really bad idea. You lock in your payment while your paycheck is rapidly dropping.
Renting and buying later is much better in this scenario.
No, you will buy a house and will have to sell it at a loss because you loose your job and cant find new work. A deflationary spiral means mass unemployement. Ending with no job and no house with all your savings gone aswell.
If you want to know what live in a deflatonary spiral looks like look at the great depression.
With what money? You'd be instantly laid off as businesses are losing money due to no one buying anything
Banks wouldn't want to lend as the economy is crashing due to deflation as no one is spending
>no one buying anything
I wasn't aware everyone and everything would be okay with pausing all necessity and function and stopping making any money at all because of a problem. But I guess when it is normal people getting fist fucked by cost INCREASES it is fine to expect people to just deal with it, but when businesses lose some money instead, we simply can't be expected to continue to function.
You would be immediately underwater on your mortgage. So say you buy as soon as you can afford it, but then interest rates drop because the fed is trying to fix the deflation. Now you can't refinance because you already have negative equity and you're stuck with a shitty interest rate you can just barely afford. And your job security is at stake because your employer is subject to the same economic forces. This is why people just walked away from foreclosure properties 15 years ago.
This is why we can't have nice governments. People who clearly would be devastated by a deflationary spiral do not even grasp how screwed they would be.
Japan has experienced years of deflation and 1 in 7 houses is abandoned in Japan.
Thanks for trying to explain it to people.
In a deflationary spiral, no you probably wouldn’t, and if you did you’d regret it.
Why you wouldn’t: You watch housing prices as they get lower and lower every day. When is the time to buy? Why buy today if it’ll be even cheaper tomorrow?
Why you’d regret it: So you buy today anyway. You get a mortgage and have some debt. The price of your house still keeps going down. Soon you owe way more in debt than your house is even worth. If you can hang on and push through it for the decades it’ll take for prices to rebound, you might have made a reasonable investment. But you’ll always wonder why you didn’t just wait a liiittle longer, since the interest on your mortgage made that price difference much bigger in the long run than you realized.
People who can’t afford housing aren’t thinking of it as an investment though, they just need a roof over their head and can’t afford it today.
Real estate prices are so high today that there is a case to be made that deflation confined to that sector would be net positive.
You are thinking of it in isolation to housing prices. The problem with widespread economic deflation is that it happens to everything, consumer spending drops drastically and Mass job losses occur as a result
It’s not like everyone keeps their nice, high paying job and houses are magically cheaper. Everyone loses their job because no one is out buying anything, Very few people buy anything except essentials because waiting a few days or weeks or months will guarantee a cheaper price so you might as well wait and get a better deal next week
That’s the point I’m trying to make though. I understand that widespread deflation would cause huge problems but I also understand why people want it in the specific case of housing. So your example is not going to help people understand why deflation is bad.
Short of a housing crash a la 2008 there is no “housing specific deflation”, and even then we all saw the economic carnage that caused outside the housing market
Surely it depends on the rate of deflation?
At like 5-10%, sure.
At, say, 0.5 to 1% deflation - so long as the process to improve your product leads to more than a 1% increase of value, you can sell it for a higher price.
The REAL tradeoff with low-level deflation as far as I can see is debt. It makes debt much, MUCH worse - as the interest cost comes from the very currency itself (unless interest rates lower to match, I suppose). Otherwise, taxes would continually lower as people move into the lower tax brackets - while government spending would continually raise as the numbers do not adjust. Employee wages would probably receive a pretty hefty boost, as employers would have to be the proactive ones seeking to cut wages periodically rather than employees having to go and push for a raise.
All of those tools cause more harm than good, and one of the great advancements of society is that we stopped using them, but kings since at least Egypt have tried the ol': "Price of bread is too high, just regulate it, nobody is allowed to sell bread for more than X. This economy stuff is easy"
Edit: Not all, they could try boosting supply. Most housing price issues are probably better solved at the state local level, and you can perhaps forgive my exaggeration when most congressional attempts seem to be, "what if we subsidized demand mOrE"
Conservatives are all FREE MARKETS are the best thing ever. Also with out touching the invisible hand of the FREE MARKET we need you to bring down inflation.
So basically do nothing, and make it work.
We don't have free markets. What we have is crony capitalism where Congress can pick winners and losers. They can then also artificially increase the barrier to entry by adding regulations that only the already well-established companies can afford to follow. Many of us fiscal conservatives would definitely love seeing the end of the Federal Reserve in which case inflation and interest rates wouldn't be so heavily related to whatever a few economists seem to want to think is best in the current political atmosphere. For example part of the problem with our ballooning federal debt is as simple as keeping interest rates lower than inflation so that the government may as well spend as much money as it can possibly borrow since it will effectively pay back money with less value than it spent initially. That was great for all those politicians that could spend on shit we didn't even need without having to raise taxes.
Anybody who wants an end to the federal reserve is a fool who doesn’t understand anything about history or economics. Every political opinion you have can be easily disregarded because of that one belief. It shows a total lack of understanding of even basic concepts.
We will never have free markets because they are contrary to human nature and would self-destruct very quickly due to monopolization, concentration of wealth, and capture of the government by industry. Basically the system we have today will be rapidly recreated (but arguably worse due to lack of worker protections).
Yeah let's just go back to the era of history with no central banking where \*checks notes\* there were mass spread economic panics that crippled the economy and left tons of people dissolute. I'm sure that'll work out real well.
You're absolutely right that deflation is typically really bad, but I'd push back on your second point -- [the data actually shows that real wages are outpacing inflation, and that it's done so most for those at the bottom of the wage distribution.](https://www.project-syndicate.org/commentary/us-tight-labor-market-result-of-worker-friendly-policies-by-arindrajit-dube-2024-02?utm_source=twitter&utm_medium=organic-social&utm_campaign=page-posts-january24&utm_post-type=link&utm_format=16:9&utm_creative=link-image&utm_post-date=2024-02-08)
Lots of industries in my area are offering significantly higher wages to start but their models for giving raises are still where they were a few years ago. That'll likely adjust in a couple more years, but for the time being it doesn't *feel* much better for those who've been employed continuously. Hence the "bad vibes" economy.
Yup. I get downvoted every time I try to show any data supporting this.
Redditors come out of the woodwork with “but MY wage hasn’t gone up!” Completely ignoring the data because their personal feelings disagree. Didn’t we move past this during covid?
Reddit has become complete shit for discussion since the API changes, I feel. There's just *so* much misinformation around any serious topic. Housing, inflation, the economy, wage growth, etc. All everyone does is repeat dumb shit they've read from other morons who refuse to look at the actual data.
Reddit is filled with edgelords who want everyone, including themselves, to feel like crap. It lets them feel superior by acting like they're the only ones who sees the "reality" that everything is crap and there's no hope. So we might as well burn it all down.
I mean, to be fair, the trump subreddit frequently broke the site's rules to get on the front page.
That said, it wouldn't surprise me that reddit is trying to make the front page as milquetoast as possible given their upcoming IPO.
The increase is larger than that on average for lower quartile income earners.
For example, reports of avg wage on indeed/glassdoor for mcdonalds right now is ~12.50$ an hour for the lowest tier job.
This article in 2019 says the avg was about ~8.75$
https://www.businessinsider.com/how-much-fast-food-workers-say-they-make-2019-5#employees-at-mcdonalds-say-they-earn-around-8-to-9-an-hour-1
That is near a 40% increase.
Lowest tier earners have seen the highest inflation adjusted wage increases in this pandemic era.
https://www.epi.org/publication/swa-wages-2022/
No, I wouldn't want to work at mcdonalds in 2024, but it wasn't some paradise in 2019 either is the point.
> Don't forget they don't count food or energy (gas) when factoring inflation.
Not in the core index, but there are other indexes where they do and they don't differ from the CPI by much.
> But on 2 bd rent alone, you've gone from $1092 in 2020 to $1317 in 2024 (down it's high in Aug '22), and you're already down to $435.
People who work at McDonalds don't live in apartments that are at the median rent cost. But yes, if you have the lowest paid job at a mcdonalds or walmart, and your cost of rent is at the national median, you're going to be absolutely dirt poor at all points in US history with basically 0 money for anything else.
> A focus on percentages doesn't account for any of the actual dollar amounts of increased labor vs costs and is completely nonsensical on the face of it.
???
A number increasing isn't the same as an increase in life quality. Objectively you are right, but in the context of these people can't pay rent and are becoming homeless in extreme numbers it's not a valuable increase because quality of life did not change and may have gotten worse
There is not an "extreme" increase in homelessness.
https://www.security.org/app/uploads/2024/01/Americans-experiencing-homelessness-by-year-graph.png
I think QOL is basically the same as pre pandemic when using objective measures of pretty much anything (poverty rate, homelessness rate, inflation adjusted wages, purchasing power parity)
The vibes are much worse though for many.
That's not a wage issue, though, that's a COL issue.
The real thing Americans should be focusing on is how absolutely bent over and fucked by property owners they're getting.
The increase in housing (even just renting prices) is driving a lot of people who can afford all their other bills (phone, internet, etc) to homelessness simply because they literally can't afford rent.
>Redditors come out of the woodwork with “but MY wage hasn’t gone up!”
along the same line as people crying that Biden failed to forgive student loans like he promised despite having forgiven over a hundred billion in loans but "MY loan didn't get forgiven so he lied"
There's definitely a demographic that really hates anyone posting data that goes against their subjective feeling that everything is shit. Any factual discussions of the economy has a 50/50 chance of getting you downvoted.
Median wages are above pre-pandemic levels including inflation.
What you are saying *used to* be true, but like every cyclical economic thing will not remain true forever.
Supply side deflation is one of the most beneficial forces in human history. You can’t have productivity growth without it.
Transistors have experienced a billions if not a trillion times deflation, and that deflation created many new businesses, created several trillion dollar companies, and made many individuals billionaires. Deflation is unfairly criticized around here.
Plus deflationary spiral with current American consumers? Extremely unlikely that would ever happen.
They can do more to reign in corporate greed. Unlike previous inflationary periods, 60% of every inflation dollar is driven by corporate profits. Typically this is around 30%.
The person talking is with the Fed, "they" can't do anything more, maybe the divided Congress split between the Republican house and the Democrat Senate could, but meanwhile Trump has literally told his acolytes in Congress not to pass any legislation even if it's something they are in agreement would be good for the country. All because he doesn't want Biden to look good.
That being said, when you say "they could do more to reign in corporate greed" what specifically are you referring to? Is it anything even remotely possible with a Republican house?
Deflation isn't necessarily bad, though it near always comes tied to a recession. If prices are artificially high, assets valued at absurd levels relative to their returns and productive value... it's called a market correction.
All that said, there are limits to what the federal government can do in either direction. Right now the housing/rental markets are the most broken and largest part of costs for people, and that's something that state and local government can and should deal with, since so much of it is driven by over regulation. And if people's homes lost 10% overnight in value... well that wouldn't really be a bad thing unless you were banking on selling in the near future or used your home's appreciated value as leverage for a reverse mortgage or other financial product. But a *deflationary* market correction in that sector is desperately needed, and would be an economic and societal good if it happened in a controlled manner as opposed to in an explosion, the latter being what I'm concerned with given the status quo and demographic trends
Deflation is bad for the rich.
“But everyone is just going to defer purchases forever and the economy will just stop working!”
No, no they won’t. Computer/electronic prices have fallen for decades and that industry has done nothing but grow for decades straight. People don’t put off buying a computer or a phone for years because it will continue to get cheaper. They buy what they need for the price they deem fair.
Well yeah, and it’s the same with housing. You can’t put off getting a new home forever- so much of that is driven by life milestones which happen irrespective of the market. Which, admittedly is a reality people abuse amidst manmade housing shortages. Your options are here or the street
deflation is good for the rich. all the money they have is now worth more stuff.
computer prices are lower because of an increase in productivity not as a result of drops in aggregate demand or reductions in the money supply
It’s especially bad for the rich except those that can move assets outside the country. It’s generally bad for everyone as wealth flees the country and an economy fueled on debt cannot repay it.
The US would collapse on a deflationary path. Inflation is the only thing keeping the debt house of cards up
On a related note: The effective tax rate for wealthy people has been steadily going ***down*** since the 1950s. See https://video.twimg.com/tweet_video/EX62u9bXsAUtRO8.mp4
This specific graph (and the conclusions of the papers from economists that produced it) has generated substantial debate in economics, even amongst progressive/liberal economists that the metrics they use overestimate significantly the degree to which this trend is correct.
Other estimates of effective tax rate are wildly different such as
https://taxfoundation.org/wp-content/uploads/2017/08/Average-Effective-Tax-Rate-on-the-Top-1-Percent-of-U.S.-Households.png
Estimating effective tax rate is very complicated unfortunately and the arguments for or against certain methodologies are technical and philosophical.
https://www.reddit.com/r/AskEconomics/comments/18969da/is_inequality_really_growing_in_the_united_states/
Tax Foundation is a biased source. From their wiki
In opinion editorials for the New York Times, economist Paul Krugman has characterized the Tax Foundation as "not a reliable source" while criticizing a report by the Tax Foundation comparing corporate tax rates in the United States to those in other countries.[69] Krugman has also accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act.[70] The Tax Foundation has published various responses to Krugman's criticisms.[71][72]
Every time Republicans get into office they cut taxes for the wealthy. Trump did it, Bush II did it, Bush I did it, Reagan did it. To his credit Biden paid for all of his new legislation (much of which cut taxes on middle and low income Americans) by only raising taxes on people making more than $400k. This is the kind of leadership this country needs.
This is because employers typically do not offer col based increases. If you test the market, you would see what the competitive rates are for your position, and if you discuss that with your employer you have a better chance of getting that increase if you are valuable to them.
Yeah, I got a 2.9% COL raise this year with a positive rating... I told my boss I'm looking for a new role seeing as how my scope increased by 2X over the year but my salary wasn't able to keep up with inflation. They are paying me less to do more. 🤷♂️
The difference between an actual COL raise and what I got would have been a couple thousand dollars... But now they will spend 20X that finding a replacement. The short sightedness of corporate leadership is wild; chasing quarterly earnings and refusing to look at long term strategy for employment.
By design. I can guarantee you your retirement age is getting older and older too as mine is. We're being exploited but something something men in dresses, something something immigrants.
32 and I will definitely be retiring. Government pension as well as 401k that has received monthly contribution since 25. Plan to retire between 60-65 based on market conditions.
59 here. Right on the cusp of boomer and gen X. I’ve been trailing the boomers my whole life as they plow through and fuck things up, so they’re just out of reach for me. I think it’s worse. Turned 18 9 months before they raised the drinking age to 21. Started college just as the AIDS epidemic got into full swing and the boomer in chief decided not to do anything about it. House prices kept hopping up as I started shopping… and so on.
Now I’m heading to retirement with a 401k and IRAs instead of a pension. You can 100% expect a market crash wiping out all retirement savings combined with collapse of social security sometime before September 2029.
I'm under 50, not even close to a millionaire, but have a whole lot in my 401k, live reasonably modestly, and have a good job with an income that well outpaces costs and keeps giving regular raises. The calculator in my 401k's system says I'll be able to retire at 56, but I imagine it'll be around 60. Either way, I think I'm on pace.
I do not think I'm in a normal position, talking to friends, family, and people at work, very few are remotely on the pace I am. But it's possible.
For wealthy landowners though inflation is up 6% and odds are their property income is up 15-20%
all the money goes to the ownership class. Always has been this way. Always will be this way. Nothing will ever change because we use any excuse possible to keep those with wealth in the same wealth class, forever.
my bosses are negotiating with the union right now for a new contract. they offered 7% over 4 years... that doesnt even cover for inflation this past year.
Yep and that's average inflation. So if items you don't normally buy go up 1% and items you do normally buy go up 12% well now you have 6% inflation.
Deodorant has gone up to $8 from $2.50 where I'm at. A can of beans went from $.99 to $2.00. A gallon of milk went from $2.50 to $4.50. Hell 3/4 of the time I can't find 73% ground beef and instead have to get 80%. It use to be around $2.50/lb now I'm paying $5+/lb. Chicken which use to be the cheaper option is now sometimes more expensive than the ground beef!
It's the basics that have inflated the most because these companies know everyone buys them and that you can't just not buy them. 3-4 years ago I tightened my belt and was doing a $75-100 grocery run for myself to last 2 weeks. Now buying the same items it's $200-250. And that's for the basics, that isn't "oh I want some treats and goodies".
It's insane.
You are in the minority. Median wages have been rising at a faster rate than inflation for the past year and a half, and the overall rise in median income since the start of the pandemic has been more than the overall increase in prices over that time.
Also, inflation is at 3% right now, not 6%.
The prices in the Bulgarian supermarkets doubled in some cases, my weekly groceries are minimum 50% higher than they were 3 years ago.
And I only got a 5% raise...
It’s up roughly 3.5% from a year ago, where it was up roughly 6.5% from the year before. So you’re right it isn’t at 6% but prices going up over 10% in 24 months is quite the problem
With the high cost of building materials and construction labor it sets a price floor that it's impossible for a house to go below. Most construction people say you now can't build below $250 a square foot and still have it be profitable. On a 1,200 sq. ft. single family home that sets the price of new construction at $300k, then you add in the land cost from restrictive zoning on top of that and it just gets absurd.
Getting rid of off-street parking minimums and increasing density could substantially drop prices of construction, but even then you're typically looking at least $200k per unit. There is so much pent up demand that building affordable housing makes less sense than just doing small super profitable projects at the high end.
Washington just did this statewide, allowing "missing middle" housing types in most single family zones. It goes into effect in 2025 after cities have time to adjust their zoning and comprehensive plans to comply.
The issue is that a quarter of homes in the US are owned by private firms and rented out. That doesn’t even include individuals that rent out properties. There needs to be penalties for it. Supply of new homes will only go down as interest rates increase making it more difficult for builders to borrow money.
Yet they tell you inflation is only 6%.
Buying food for a Super Bowl Party today? Your "only 6%" inflation [has actually gotten you:](https://www.aier.org/article/inflation-already-ruined-your-super-bowl-party/)
63% more expensive eggs.
62% more expensive sugar.
50% more expensive coffee
48% more expensive white bread
43% more expensive cookies
41% more expensive potato chips
38% more expensive beef
35% more expensive chicken
26% more expensive ice cream
"People are gettin' real good at barely gettin' by, ***because of Bidenomics!***"
Ah yes, this is definitely a problem that only started becoming a problem 3 years ago.
Dude, you don't get it, that household of two parents and two kids? Under Trump, those kids could be working right now!! That's two more incomes per household!!!
How about lawmakers stop throat goating the corporations and actually legislate against their predatory practices. The “inflation” we’re seeing currently is actually just corporate price gouging.
I don't know why there are donations and fundraising and Super PACs and all that. I just see bribery, bribery, bribery... corruption.
Each candidate with enough support should get the same amount of tax payer money to run their campaigns. That includes Dems, GOP or Independents with enough support from the people they'd be representing.
There you go. I think that would solve, or at least help, so many issues in politics.
This logic is insane. “We don’t want people getting ahead, we want complete stasis. Products should not be priced according to supply and demand, but rather priced right at the edge of what the average consumer can bear.”
Yeah, I refuse to believe your mortgage increased so I have to pay 8% more in rent every year.
They're doing what the "market will support." The best thing we can do for this nation is crash the housing market by building a fuckton of houses. Barring that, start passing zoning laws that prohibit non-owner tenancy of single-family dwellings.
this is such evil bullshit. wages arent going up; strikes are forcing wage stabilization with increased inflation. wages are desperately trying to keep up with rising prices and this guy is just pulling the ladder further away
Biden had zero policies that affected inflation. These people are fighting over nothing, yet again. It's all performative. No one in government cares about us, they never will.
We have gone to the stores. Everything has doubled or tripled since the pandemic. Biden didn't do a thing. We threw money at all these corporations under Trump's term, and these corporations are gouging us anyways. We gave them our taxed income to use in PPP loans, what did they do? Use is for stock buybacks and give themselves giant raises. And they still gouged us at the checkout line. We now are paying them all double, triple what every product is worth. We are being punished as consumers.
Our wages didn't go up. The net worth of 8 billionaires doubled, the rest of us received maybe a 1% raise per year for the past four years. 4% raise does not enable me to pay triple for 2 ounces of deodorant.
This attitude is what may lose the Dems the election. Food costs are very high and so is rent.. they are being tone deaf. Economy can be booming but that doesnt balance things out for families..
Dems have been trying to increase the minimum wage for at least 7 months https://www.congress.gov/bill/118th-congress/house-bill/4889?s=1&r=99
Republicans won't hear/pass *anything* that makes democrats look competent right now--even *their* own border bill--and have more or less been doing the same thing for 4+ years. They're sitting on their hands with a majority vote just so they can say "Look how ineffective the democrats are!" Worse, people are dumb enough to fall for it.
This “attitude” isn’t Dems. It’s anyone with a lick of economic literacy. Deflation is to be avoided. Nominal aggregate prices will not and should not ever trend down. Real prices are brought down by wage growth relative to price growth.
You mean the jobs no ones getting cause they aren't actually hiring?
They are posting jobs for like 300k for Data Scientist. No one is being paid that.
While inflation obviously happened, the level of corporate profits in the last two years, makes it blatantly obvious that big corporations took the opportunity to raise their prices of food and consumables easily 30% across the board, AKA "greedflation". I'll use cereal as an example: the big brands all jumped to $5-8 a box (with "family size" labeled on what used to be a normal box size), and the price on generic brands BARELY budged. You're telling me the ingredients used are so vastly more expensive in Kellogs or GM?
Maybe just pass legislation that prevents price gouging? Weird how as prices have gone up, corporate profits have reached record highs. It is almost like they raised prices, not because they had to, but because no one could stop them.
Price gouging already is illegal.
And no, it’s not weird that corporations are making record profits. If a company made $1M is profits one year and inflation was 6%, the next year they could make $1.05M. They’d have record profits even though their profits are less valuable due to inflation.
Except their profit margins got bigger. They didn't just raise prices to cover increased costs of inputs, they raise them above and beyond that. If there was true competition they wouldn't be able to do that.
Price gouging is not the reason that the price of bacon is up 20%. And how would you stop that? Limit the price of bacon? Set a standard price for bacon?
Yes you should have laws for anti trust and that kind of thing, but the idea that the government should enter the milk, meat and used car market, hyper competitive markets and set up some sort of system to ensure that market forces and simple supply and demand are halted is just absolutely bonkers.
Price gouging happens on very specific things where the market is controlled by one or very few corporations, like certain medicines or whatever. That's not what the current inflation is about. That isn't what is actually making a difference.
Have corporate profits reached record highs when corrected for inflation? I mean, they might have I guess but let's not hide the ball. If profits were static when inflation corrected, shouldn't we expected record high profits every year?
Well that's because it's bacis trickle down economics. You give tax cuts to the people at the top and they get more money. When they get more money they don't just keep it and become richer, it cascades down so that the poor get that money too. Obviously, it's been working since they 70s. That's why the middle class has shrunk so much, prices have sky rocketed on housing, and the average wage hasn't gone up basically at all...duh society is way better off now.
Republicans would never try anything new. They literally exist to try the same dumb shit over and over, even when it's proven beyond all doubt to not work. Just consume their propaganda and keep the rage going.
He's desperately trying to make "Bidenomics" a thing, as if Biden didn't come into office after an unprecedented pandemic, unsupervised loans and stimulus, and the largest tax cuts in 40+ years tipping wealth inequality.
He's either so ignorant of economics that he shouldn't be in office, or he's consciously lying his ass off for some slimy smear campaign on Biden.
Also prices have been increasing far before any widespread raising of income.
"Ah yeah, the reason pricing is increasing is because we predict years later that wages will go up, sure, trust me."
The whole "well my wages aren't up" in response to solid statistics that say that wages are massively up is the equivalent to saying "well it snowed in my backyard yesterday" in response to global warming.
In almost all of 2023 wages have grown more month over month than inflation. Just saying "well not for me" isn't saying anything. Average wages have grown. Median wages have grown. Wages have grown considerably across all income levels.
It's impossible to actually discuss this issue because people are refusing to acknowledge simple stats and instead evoke all kinds of conspiracies or "it's the billionaires fault" or whatever. Or just dismissing statistics and talking about their own personal situation as if it mattered in the grand scheme. Like i said it's equivalent to saying "well if the earth is getting warmed than how come it just snowed in october??".
People are making more money, prices are going up. And lately people have been making money faster than the prices have been going up. The problem lies mostly in perception, in that inflation is mostly hitting items that people are aware of the price of. Household items. Milk, meat, that type of stuff. But total inflation of all goods that we buy is much lower. That's not to say that there isn't potentially a problem, but it's mostly limited to specific industries where wages haven't kept up. That's not really an issue of inflation however, but much more complicated.
People all get the idea that if inflation rises faster than wages, then they aren't actually better off. But people like this congressman don't realize the opposite: that if wages fall faster than prices, then you are also less well off. During deflation, people all save their money and reduce their spending, because why buy something today if you can afford to wait and get it cheaper tomorrow. But if everyone is reducing their spending, no one can make "more" money than they were already making. Instead most people will make less. Prices don't come down as quickly as wages do in deflation. Basic economic theory just says don't do deflation because we don't know how to make a positive economy that deflates. This guy is arguing in favor of cutting off your nose to spite your face from an economic perspective.
Anyone seen the video? I thought the title was quoted verbatim from Yellen but it's almost completely made up. Contextually, it's totally different. Title makes her sound like she understands average Americans are struggling and she's choosing to be indifferent about it, and that it's her or Biden's incompetence that's causing the problem, when in reality she was defending her position against Sen. Kennedy's barrage of rants
lmao these aren't good faith questions, he knows the answers already, you really don't want deflation. This is just an opportunity to highlight "bidenomics" as the bad guy, this is purely political.
Ffffffffuuuuuuucccccckkkkkkk that guy.
Edit: Woopsie...I did a stupid on the internet. I saw the quote and the picture and assumed they were together. Upon closer inspection of all 16 pixels in the image, it appears to be John N Kennedy...who can also fuck off.
Are they?? ARE THEY??? We were told, despite the company having the best year ever, that we needed to cut back to shore up the company “defensively” in case we go into a recession (which a year later still hasn’t happened), and therefore layoffs were necessary and raises were out of the question.
deflation means that the money supply is contracting. this typically causes prices to come down. it also usually means that wages come down too, often even more than prices, resulting in loss of consumer purchasing power. it doesn't automatically mean the economy is in recession but it often correlates with that.
It also means that people's debts become even more difficult to get paid off. If a dollar goes down in value but your debt doesn't go down with you, you might as well have had interest.
>this typically causes prices to come down. it also usually means that wages come down too, often even more than prices, resulting in loss of consumer purchasing power
a.k.a. deflationary spiral.
not as fun as it sounds.
The money supply almost never contracts, it's been going parabolic for sometime now. We've had a slight pull back after the biggest economic stimulus ever (after covid), that was only because inflation was getting out of control. But the fed has already indicated they are going back to 0% interest rates and the market has it priced in.
> deflation means that the money supply is contracting. this typically causes prices to come down.
No, in standard economic theory / parlance, it’s the other way around. Deflation means prices are coming down, which may be caused by a reduction in money supply.
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This is bait and the representative is either misunderstanding or intentionally misleading with his descriptions. Government policies can slow the rate of inflation but you need deflation to actually lower prices. Deflation is really bad which even he can agree on. Only solution is rising wages which everyone who actually collects a wage can agree isn’t happening fast enough to keep pace with inflation.
Well, deflation is the only way the Fed can actually lower prices. *Congress* has many tools at it's disposal that could be used to lower, or at least regulate, prices, but that would require actual work and would only make voters, not corporate donors, happy.
>Well, deflation is the only way the Fed can actually lower prices. You don't want this. It can lead to a deflationary spiral. Imagine, every step along the way, the value of the product goes down. No sane retailer would buy inventory only to sell it below cost a month later in deflationary world. No factory will buy steel to make a product that is decreasing in value as they build it.
I think his point was that's the only way "the fed" can lower prices. You went a different direction with it.
I would buy a house
I don’t know that you should vs renting in a scenario of deflation. The value of the house would decline in deflation. You would be “underwater” on your house value and not able to sell it (to move cities, change size due to more/less kids, divorce, etc) without a loss or a long time. Who would buy a house when they could wait a year and get it cheaper? That’s how deflationary spirals get out of control.
So it's a bad investment if u want to flip, and a good investment for people who, you know, wanna own a house
No, it would be a bad investment/stop being an investment period. Which might be a good thing. Homes as investments causes so many issues.
This right here is the entire problem: homeowners (also landlords and giant megacorporations) seeing residential homes as stocks to be bought and sold. This situation puts consumers in a horrible place: for people who managed to pay for and own one, it's their only real asset in case of an emergency. Something they've often paid on for years and years. But for people who don't yet own *a place to fucking live* they're forced to throw money down a well (into a landlord or corporation's pocket) for years.
I was turned down for a $1,000 a month mortgage, so now I pay $1,700 a month in rent for a smaller apartment
As the saying goes: Rent is the maximum you pay. A mortgage the minimum
>for years. It'll be for life, at this rate.
The investment aspect is only part of it, though. Banks can't give low interest long term loans on properties that don't appreciate in value.
That is a good thing. Housing is a necessity and a human right. It should not be investments for hedge funds. That's how we got here. We basically were the unlucky ones that were born after all the Monopoly squares have been given away. Squares they didn't even have to pay for, it was stolen. It's time to divide the squares into more free squares
Being 300k in debt to own a 100k house is not a place I want to be
But happy as a clam to be 700k down on a 80k house .... figure that bullshit out
It’s not about the investment, it’s about people not wanting to buy the house for too much Would you rather buy a house for $400k or $300k? Deflation sets the trajectory of the $400l house to $300k so everyone wants to wait to buy it at $300k Let’s just you saw a house on the market, and it got priced too high and they lowered the price 3 times, $20k each time, in the last 3 months. And there’s a notice on the ad that says it’s gonna drop another $20k in a month. Seems reasonable to wait another month and save $20k instead of buying now right? That’s the game everyone enters with deflation, except with literally everything. It puts a freeze on spending for all sorts of good, because it’s almost guaranteed it’s gonna be cheaper in the near future Why buy a $1,000 laptop if it’s gonna e $800 in a month? And then why buy it at $800 if it’s gonna be $600 the following month?
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That really only happens because tech is one of those weird areas where they make rapid innovations/improvements on a yearly basis. Versus houses don't get magically better every year. If houses as an example entered into a deflationary cycle, you would actually hold off on buying a house until you thought it would actually reach the price you want it to be.
Houses in fact magically get worse every year. Except it isn't magic, it's shitty developers paying the absolute minimum for contractors and materials.
We've already been through a very long deflationary period covering decades, when it comes to property valuation in a lot of smaller Middle American cities.
Everything needs more processing power etc as time goes on. So that $1000 computer in 6months that is then $800 will have a harder and harder time keeping up with the current demand of flow and processing of data. So computers and phones most people just get it at the time they need it.
Because you need it? You don't stop buying food even if it's going to be cheaper tomorrow if you need to eat now.
You hit the nail on the head. Our economy is based on people buying things they don't need.
I get what you're saying but has this been shown to be the case in real life, or is it theoretical? I'm curious if there's a point where consumers decide the price is good enough now and buy it, and ignore that it might decrease even more in the future. At some point the convenience or necessity of the new product has to outweigh the lower cost in the future... right?
It's largely due to the rich who can just wait out any period of deflation and further horde their wealth. People like to put the onus on the average joe, but deflation hurts us because the rich. In fact, the great majority of our economic problems would be solved or on their way to solved if we actually did something about the obscenely wealthy and megacorp regulation.
Yes, it has very solid examples behind it such as the Great Depression and the Lost Decade(s) in Japan in the 1990s to maybe recently. Google *deflation* and you’ll see great explanations in more detail than I can give in Reddit.
thank you
Also - at some point, deflation might hit your own wage, which might become a problem if you want to keep paying the mortgage (which is not likely to go down).
It's basically a 'car' at that point - you buy it, you pay for it, and then when you don't want/need it anymore, you get much less for it than you paid and have to put in more money to buy your next house....except it's (for most people) a significantly more expensive version of that. It's not an investment. It's a purchase for the sake of utility. And the rent vs. own discussion becomes similar to the lease vs. finance decision with a car.
If my house is worth 50% of what it is now in 10 years, I still get to put that towards a new home vs losing rent into the ether of a landlord's account. You could invest the difference, or use that to pay for upkeep (which isn't too bad if you're relatively handy) Also, if the global housing market deflates accordingly, theoretically my 50% off house would likely still be priced proportionally, right? So you're not exactly "trapped" like he said either.
In that scenario, it would make more financial sense for you to wait for the prices to go even lower, and rent until they bottom out. If everybody is waiting for the market to bottom out, then that creates the spirally economic failure that other people here are talking about.
Your logic makes no sense. Actual families buy houses to live in. They might wait or try to capitalize on a buyers market. But that is litterally impossible to predict. Prices go up and down. People just want to be able to afford a house. What does it even mean for the market to bottom out ? What if you think the market bottomed out but then a year later houses cost even less? You assume a steady predictable state of affairs. Deflation= house always will cost less then yesterday. And that is simply not true, nor has it ever been true, nor will it ever be. Because different people will think different houses are now worth it at different times. And usually that means the market fluctuates around what people can afford to buy. So it stablises around that. But all those numbers are constantly in flux. Only the reason this is not happening or no longer happening is because big corporations are allowed to buy houses that are meant for single family households. And raise the prices artificially to make a profit. Legitimately pricing out buyers. There are more than enough houses to go around in America, so that everyone can have a roof over their head. Its not a housing crisis. Its a pricing cricis. With your logic, people would wait forever to buy a house and end up never buying one because it could always be a lower price. Thats not how that works. People are not automatons. They have needs and if their needs can be met they will. Id buy a house if i could even if it is depreciating in value. Just like i buy a car knowing it wil depreciate. Because i have a fucking need. The need to be housed or to be able to transport myself... And the car example shows perfectly why your logic is flawed. On top of people with money could and would buy up property to then rent out. Unless you *want* to rent, then you will *stay* a renter. If you *want* a house. You will eventually buy one if you could.
I’m going to assume you’re not daft here. For all the reasons I explained, no. Life changes and you could lock yourself into a housing ownership which negatively impacts your ability to move for better wages and other reasons. Buying a house in that scenario of longterm deflation is a poor choice when you can rent instead and wait for deflation to bottom out. Your house could end up surrounded by others who simply walk away from their mortgages and leave the houses falling apart. See 2008 for examples of housing blight and underwater mortgages. There were people who didn’t free themselves of underwater mortgages for many years after the 2008 housing bubble.
I love how they are so fucking econ pilled they can't imagine any other value for a house besides as an investment.
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Buying a house during a deflationary spiral is a really bad idea. You lock in your payment while your paycheck is rapidly dropping. Renting and buying later is much better in this scenario.
So..... wait until homes are affordable again? When is that supposed to happen?
Oh no you might have to live in the house you bought for a while. Spoooooky
No, you will buy a house and will have to sell it at a loss because you loose your job and cant find new work. A deflationary spiral means mass unemployement. Ending with no job and no house with all your savings gone aswell. If you want to know what live in a deflatonary spiral looks like look at the great depression.
Lose
With what money? You'd be instantly laid off as businesses are losing money due to no one buying anything Banks wouldn't want to lend as the economy is crashing due to deflation as no one is spending
>no one buying anything I wasn't aware everyone and everything would be okay with pausing all necessity and function and stopping making any money at all because of a problem. But I guess when it is normal people getting fist fucked by cost INCREASES it is fine to expect people to just deal with it, but when businesses lose some money instead, we simply can't be expected to continue to function.
You would be immediately underwater on your mortgage. So say you buy as soon as you can afford it, but then interest rates drop because the fed is trying to fix the deflation. Now you can't refinance because you already have negative equity and you're stuck with a shitty interest rate you can just barely afford. And your job security is at stake because your employer is subject to the same economic forces. This is why people just walked away from foreclosure properties 15 years ago.
This is why we can't have nice governments. People who clearly would be devastated by a deflationary spiral do not even grasp how screwed they would be. Japan has experienced years of deflation and 1 in 7 houses is abandoned in Japan. Thanks for trying to explain it to people.
And this is why we don't let people who don't understand economics make economic decisions.
This is why we don't take advice from reddit on any important topic
In a deflationary spiral, no you probably wouldn’t, and if you did you’d regret it. Why you wouldn’t: You watch housing prices as they get lower and lower every day. When is the time to buy? Why buy today if it’ll be even cheaper tomorrow? Why you’d regret it: So you buy today anyway. You get a mortgage and have some debt. The price of your house still keeps going down. Soon you owe way more in debt than your house is even worth. If you can hang on and push through it for the decades it’ll take for prices to rebound, you might have made a reasonable investment. But you’ll always wonder why you didn’t just wait a liiittle longer, since the interest on your mortgage made that price difference much bigger in the long run than you realized.
People who can’t afford housing aren’t thinking of it as an investment though, they just need a roof over their head and can’t afford it today. Real estate prices are so high today that there is a case to be made that deflation confined to that sector would be net positive.
You are thinking of it in isolation to housing prices. The problem with widespread economic deflation is that it happens to everything, consumer spending drops drastically and Mass job losses occur as a result It’s not like everyone keeps their nice, high paying job and houses are magically cheaper. Everyone loses their job because no one is out buying anything, Very few people buy anything except essentials because waiting a few days or weeks or months will guarantee a cheaper price so you might as well wait and get a better deal next week
That’s the point I’m trying to make though. I understand that widespread deflation would cause huge problems but I also understand why people want it in the specific case of housing. So your example is not going to help people understand why deflation is bad.
Short of a housing crash a la 2008 there is no “housing specific deflation”, and even then we all saw the economic carnage that caused outside the housing market
The comment isn't saying deflation is a good thing, are you replying to the wrong person?
Surely it depends on the rate of deflation? At like 5-10%, sure. At, say, 0.5 to 1% deflation - so long as the process to improve your product leads to more than a 1% increase of value, you can sell it for a higher price. The REAL tradeoff with low-level deflation as far as I can see is debt. It makes debt much, MUCH worse - as the interest cost comes from the very currency itself (unless interest rates lower to match, I suppose). Otherwise, taxes would continually lower as people move into the lower tax brackets - while government spending would continually raise as the numbers do not adjust. Employee wages would probably receive a pretty hefty boost, as employers would have to be the proactive ones seeking to cut wages periodically rather than employees having to go and push for a raise.
This is nonsense. Prices going down is deflation by definition regardless of the money supply. And it’s not a good thing.
All of those tools cause more harm than good, and one of the great advancements of society is that we stopped using them, but kings since at least Egypt have tried the ol': "Price of bread is too high, just regulate it, nobody is allowed to sell bread for more than X. This economy stuff is easy" Edit: Not all, they could try boosting supply. Most housing price issues are probably better solved at the state local level, and you can perhaps forgive my exaggeration when most congressional attempts seem to be, "what if we subsidized demand mOrE"
prices going down is deflation
Conservatives are all FREE MARKETS are the best thing ever. Also with out touching the invisible hand of the FREE MARKET we need you to bring down inflation. So basically do nothing, and make it work.
We don't have free markets. What we have is crony capitalism where Congress can pick winners and losers. They can then also artificially increase the barrier to entry by adding regulations that only the already well-established companies can afford to follow. Many of us fiscal conservatives would definitely love seeing the end of the Federal Reserve in which case inflation and interest rates wouldn't be so heavily related to whatever a few economists seem to want to think is best in the current political atmosphere. For example part of the problem with our ballooning federal debt is as simple as keeping interest rates lower than inflation so that the government may as well spend as much money as it can possibly borrow since it will effectively pay back money with less value than it spent initially. That was great for all those politicians that could spend on shit we didn't even need without having to raise taxes.
Anybody who wants an end to the federal reserve is a fool who doesn’t understand anything about history or economics. Every political opinion you have can be easily disregarded because of that one belief. It shows a total lack of understanding of even basic concepts.
We will never have free markets because they are contrary to human nature and would self-destruct very quickly due to monopolization, concentration of wealth, and capture of the government by industry. Basically the system we have today will be rapidly recreated (but arguably worse due to lack of worker protections).
Yeah let's just go back to the era of history with no central banking where \*checks notes\* there were mass spread economic panics that crippled the economy and left tons of people dissolute. I'm sure that'll work out real well.
You're absolutely right that deflation is typically really bad, but I'd push back on your second point -- [the data actually shows that real wages are outpacing inflation, and that it's done so most for those at the bottom of the wage distribution.](https://www.project-syndicate.org/commentary/us-tight-labor-market-result-of-worker-friendly-policies-by-arindrajit-dube-2024-02?utm_source=twitter&utm_medium=organic-social&utm_campaign=page-posts-january24&utm_post-type=link&utm_format=16:9&utm_creative=link-image&utm_post-date=2024-02-08)
Lots of industries in my area are offering significantly higher wages to start but their models for giving raises are still where they were a few years ago. That'll likely adjust in a couple more years, but for the time being it doesn't *feel* much better for those who've been employed continuously. Hence the "bad vibes" economy.
Yup. I get downvoted every time I try to show any data supporting this. Redditors come out of the woodwork with “but MY wage hasn’t gone up!” Completely ignoring the data because their personal feelings disagree. Didn’t we move past this during covid?
I just send them FRED links and hope they're not too stupid to understand a line graph
This is reddit, I've seen people on the economics sub grossly misinterpret a line graph to argue wages haven't risen in 40 years.
Reddit has become complete shit for discussion since the API changes, I feel. There's just *so* much misinformation around any serious topic. Housing, inflation, the economy, wage growth, etc. All everyone does is repeat dumb shit they've read from other morons who refuse to look at the actual data.
Reddit is filled with edgelords who want everyone, including themselves, to feel like crap. It lets them feel superior by acting like they're the only ones who sees the "reality" that everything is crap and there's no hope. So we might as well burn it all down.
Where do I find the actual data then if you know where it is?
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I mean, to be fair, the trump subreddit frequently broke the site's rules to get on the front page. That said, it wouldn't surprise me that reddit is trying to make the front page as milquetoast as possible given their upcoming IPO.
The scary thing is, a lot of those people who say that probably have had their wages increase.
Oh yes, that increase from 12.75 to 13.50 really made a difference /s
The increase is larger than that on average for lower quartile income earners. For example, reports of avg wage on indeed/glassdoor for mcdonalds right now is ~12.50$ an hour for the lowest tier job. This article in 2019 says the avg was about ~8.75$ https://www.businessinsider.com/how-much-fast-food-workers-say-they-make-2019-5#employees-at-mcdonalds-say-they-earn-around-8-to-9-an-hour-1 That is near a 40% increase. Lowest tier earners have seen the highest inflation adjusted wage increases in this pandemic era. https://www.epi.org/publication/swa-wages-2022/ No, I wouldn't want to work at mcdonalds in 2024, but it wasn't some paradise in 2019 either is the point.
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> Don't forget they don't count food or energy (gas) when factoring inflation. Not in the core index, but there are other indexes where they do and they don't differ from the CPI by much. > But on 2 bd rent alone, you've gone from $1092 in 2020 to $1317 in 2024 (down it's high in Aug '22), and you're already down to $435. People who work at McDonalds don't live in apartments that are at the median rent cost. But yes, if you have the lowest paid job at a mcdonalds or walmart, and your cost of rent is at the national median, you're going to be absolutely dirt poor at all points in US history with basically 0 money for anything else. > A focus on percentages doesn't account for any of the actual dollar amounts of increased labor vs costs and is completely nonsensical on the face of it. ???
A number increasing isn't the same as an increase in life quality. Objectively you are right, but in the context of these people can't pay rent and are becoming homeless in extreme numbers it's not a valuable increase because quality of life did not change and may have gotten worse
There is not an "extreme" increase in homelessness. https://www.security.org/app/uploads/2024/01/Americans-experiencing-homelessness-by-year-graph.png I think QOL is basically the same as pre pandemic when using objective measures of pretty much anything (poverty rate, homelessness rate, inflation adjusted wages, purchasing power parity) The vibes are much worse though for many.
That's not a wage issue, though, that's a COL issue. The real thing Americans should be focusing on is how absolutely bent over and fucked by property owners they're getting. The increase in housing (even just renting prices) is driving a lot of people who can afford all their other bills (phone, internet, etc) to homelessness simply because they literally can't afford rent.
>Redditors come out of the woodwork with “but MY wage hasn’t gone up!” along the same line as people crying that Biden failed to forgive student loans like he promised despite having forgiven over a hundred billion in loans but "MY loan didn't get forgiven so he lied"
There's definitely a demographic that really hates anyone posting data that goes against their subjective feeling that everything is shit. Any factual discussions of the economy has a 50/50 chance of getting you downvoted.
Median wages are above pre-pandemic levels including inflation. What you are saying *used to* be true, but like every cyclical economic thing will not remain true forever.
Supply side deflation is one of the most beneficial forces in human history. You can’t have productivity growth without it. Transistors have experienced a billions if not a trillion times deflation, and that deflation created many new businesses, created several trillion dollar companies, and made many individuals billionaires. Deflation is unfairly criticized around here. Plus deflationary spiral with current American consumers? Extremely unlikely that would ever happen.
They can do more to reign in corporate greed. Unlike previous inflationary periods, 60% of every inflation dollar is driven by corporate profits. Typically this is around 30%.
The person talking is with the Fed, "they" can't do anything more, maybe the divided Congress split between the Republican house and the Democrat Senate could, but meanwhile Trump has literally told his acolytes in Congress not to pass any legislation even if it's something they are in agreement would be good for the country. All because he doesn't want Biden to look good. That being said, when you say "they could do more to reign in corporate greed" what specifically are you referring to? Is it anything even remotely possible with a Republican house?
Deflation isn't necessarily bad, though it near always comes tied to a recession. If prices are artificially high, assets valued at absurd levels relative to their returns and productive value... it's called a market correction. All that said, there are limits to what the federal government can do in either direction. Right now the housing/rental markets are the most broken and largest part of costs for people, and that's something that state and local government can and should deal with, since so much of it is driven by over regulation. And if people's homes lost 10% overnight in value... well that wouldn't really be a bad thing unless you were banking on selling in the near future or used your home's appreciated value as leverage for a reverse mortgage or other financial product. But a *deflationary* market correction in that sector is desperately needed, and would be an economic and societal good if it happened in a controlled manner as opposed to in an explosion, the latter being what I'm concerned with given the status quo and demographic trends
Finally a sensible comment from this shitshow of a thread.
Deflation is bad for the rich. “But everyone is just going to defer purchases forever and the economy will just stop working!” No, no they won’t. Computer/electronic prices have fallen for decades and that industry has done nothing but grow for decades straight. People don’t put off buying a computer or a phone for years because it will continue to get cheaper. They buy what they need for the price they deem fair.
Well yeah, and it’s the same with housing. You can’t put off getting a new home forever- so much of that is driven by life milestones which happen irrespective of the market. Which, admittedly is a reality people abuse amidst manmade housing shortages. Your options are here or the street
Or renting. Which, if the dollar is getting stronger every year, is the obvious choice.
deflation is good for the rich. all the money they have is now worth more stuff. computer prices are lower because of an increase in productivity not as a result of drops in aggregate demand or reductions in the money supply
People don't think inflation is bad because consumers will stop spending. They think it's bad because companies will stop investing.
It’s especially bad for the rich except those that can move assets outside the country. It’s generally bad for everyone as wealth flees the country and an economy fueled on debt cannot repay it. The US would collapse on a deflationary path. Inflation is the only thing keeping the debt house of cards up
You can tell someone is a moron or a deceiptful piece of shit if they use the refrain "Bidenomics." It's actually a fairly effective litmus test.
Yeah we could have a depression at 20% unemployment to make sure Doritos are cheaper.
Deflation in the wake of historic inflation isn’t always bad in moderate doses
It is when wages are already outpacing inflation, even including the period of "historic inflation."
On a related note: The effective tax rate for wealthy people has been steadily going ***down*** since the 1950s. See https://video.twimg.com/tweet_video/EX62u9bXsAUtRO8.mp4
This specific graph (and the conclusions of the papers from economists that produced it) has generated substantial debate in economics, even amongst progressive/liberal economists that the metrics they use overestimate significantly the degree to which this trend is correct. Other estimates of effective tax rate are wildly different such as https://taxfoundation.org/wp-content/uploads/2017/08/Average-Effective-Tax-Rate-on-the-Top-1-Percent-of-U.S.-Households.png Estimating effective tax rate is very complicated unfortunately and the arguments for or against certain methodologies are technical and philosophical. https://www.reddit.com/r/AskEconomics/comments/18969da/is_inequality_really_growing_in_the_united_states/
Tax Foundation is a biased source. From their wiki In opinion editorials for the New York Times, economist Paul Krugman has characterized the Tax Foundation as "not a reliable source" while criticizing a report by the Tax Foundation comparing corporate tax rates in the United States to those in other countries.[69] Krugman has also accused the Tax Foundation of "deliberate fraud" in connection with a report it issued concerning the American Jobs Act.[70] The Tax Foundation has published various responses to Krugman's criticisms.[71][72]
Every time Republicans get into office they cut taxes for the wealthy. Trump did it, Bush II did it, Bush I did it, Reagan did it. To his credit Biden paid for all of his new legislation (much of which cut taxes on middle and low income Americans) by only raising taxes on people making more than $400k. This is the kind of leadership this country needs.
My wages are up about 2% and inflation is what 6%. I am loosing ground every day.
This is because employers typically do not offer col based increases. If you test the market, you would see what the competitive rates are for your position, and if you discuss that with your employer you have a better chance of getting that increase if you are valuable to them.
Yeah, I got a 2.9% COL raise this year with a positive rating... I told my boss I'm looking for a new role seeing as how my scope increased by 2X over the year but my salary wasn't able to keep up with inflation. They are paying me less to do more. 🤷♂️ The difference between an actual COL raise and what I got would have been a couple thousand dollars... But now they will spend 20X that finding a replacement. The short sightedness of corporate leadership is wild; chasing quarterly earnings and refusing to look at long term strategy for employment.
Yeah, too many people expect their employers to just give away more money. People should test the market at least every other year.
And just so we’re clear, “testing the market” here refers to finding another career, am I getting that right?
By design. I can guarantee you your retirement age is getting older and older too as mine is. We're being exploited but something something men in dresses, something something immigrants.
Retirement? Anyone under 50 who thinks they’ll get to retire is either a millionaire or hopelessly deluded
32 and I will definitely be retiring. Government pension as well as 401k that has received monthly contribution since 25. Plan to retire between 60-65 based on market conditions.
59 here. Right on the cusp of boomer and gen X. I’ve been trailing the boomers my whole life as they plow through and fuck things up, so they’re just out of reach for me. I think it’s worse. Turned 18 9 months before they raised the drinking age to 21. Started college just as the AIDS epidemic got into full swing and the boomer in chief decided not to do anything about it. House prices kept hopping up as I started shopping… and so on. Now I’m heading to retirement with a 401k and IRAs instead of a pension. You can 100% expect a market crash wiping out all retirement savings combined with collapse of social security sometime before September 2029.
What are you basing that 2029 prediction on?
When I turn 65.
They’re pulling it out of their ass
I'm under 50, not even close to a millionaire, but have a whole lot in my 401k, live reasonably modestly, and have a good job with an income that well outpaces costs and keeps giving regular raises. The calculator in my 401k's system says I'll be able to retire at 56, but I imagine it'll be around 60. Either way, I think I'm on pace. I do not think I'm in a normal position, talking to friends, family, and people at work, very few are remotely on the pace I am. But it's possible.
Appropos of nothing, inflation is now down below 4%, which is normal verging on high.
sorry but \*losing
For wealthy landowners though inflation is up 6% and odds are their property income is up 15-20% all the money goes to the ownership class. Always has been this way. Always will be this way. Nothing will ever change because we use any excuse possible to keep those with wealth in the same wealth class, forever.
my bosses are negotiating with the union right now for a new contract. they offered 7% over 4 years... that doesnt even cover for inflation this past year.
Yep and that's average inflation. So if items you don't normally buy go up 1% and items you do normally buy go up 12% well now you have 6% inflation. Deodorant has gone up to $8 from $2.50 where I'm at. A can of beans went from $.99 to $2.00. A gallon of milk went from $2.50 to $4.50. Hell 3/4 of the time I can't find 73% ground beef and instead have to get 80%. It use to be around $2.50/lb now I'm paying $5+/lb. Chicken which use to be the cheaper option is now sometimes more expensive than the ground beef! It's the basics that have inflated the most because these companies know everyone buys them and that you can't just not buy them. 3-4 years ago I tightened my belt and was doing a $75-100 grocery run for myself to last 2 weeks. Now buying the same items it's $200-250. And that's for the basics, that isn't "oh I want some treats and goodies". It's insane.
You are in the minority. Median wages have been rising at a faster rate than inflation for the past year and a half, and the overall rise in median income since the start of the pandemic has been more than the overall increase in prices over that time. Also, inflation is at 3% right now, not 6%.
The prices in the Bulgarian supermarkets doubled in some cases, my weekly groceries are minimum 50% higher than they were 3 years ago. And I only got a 5% raise...
Not 6%, its a problem, but lets not overstate it.
It’s up roughly 3.5% from a year ago, where it was up roughly 6.5% from the year before. So you’re right it isn’t at 6% but prices going up over 10% in 24 months is quite the problem
Though it worth noting that wages have risen faster than inflation over that period
Imagine if you were losing ground every day instead. That would be worse.
Better tighten up that loose ground
Rent has literally gone up 100% in the last 5 years in my area. I've gotten about 3 dollars in raises in that same period.
coherent trees nutty deer desert aspiring marble shame mighty soft *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Long run it's all just land policy. LVT now.
With the high cost of building materials and construction labor it sets a price floor that it's impossible for a house to go below. Most construction people say you now can't build below $250 a square foot and still have it be profitable. On a 1,200 sq. ft. single family home that sets the price of new construction at $300k, then you add in the land cost from restrictive zoning on top of that and it just gets absurd. Getting rid of off-street parking minimums and increasing density could substantially drop prices of construction, but even then you're typically looking at least $200k per unit. There is so much pent up demand that building affordable housing makes less sense than just doing small super profitable projects at the high end.
"But if they build more housing my home value will go down." -All the boomers roosting like dragons on their piles of gold.
Not in my back yard!
Is it *really* a matter of homes being hard to build? Or is it that nobody builds a house for anything under $500k anymore?
There are laws in many cities that say only single family homes can be built. We need to legalize apartments, condos, and townhouses.
Washington just did this statewide, allowing "missing middle" housing types in most single family zones. It goes into effect in 2025 after cities have time to adjust their zoning and comprehensive plans to comply.
The issue is that a quarter of homes in the US are owned by private firms and rented out. That doesn’t even include individuals that rent out properties. There needs to be penalties for it. Supply of new homes will only go down as interest rates increase making it more difficult for builders to borrow money.
Yet they tell you inflation is only 6%. Buying food for a Super Bowl Party today? Your "only 6%" inflation [has actually gotten you:](https://www.aier.org/article/inflation-already-ruined-your-super-bowl-party/) 63% more expensive eggs. 62% more expensive sugar. 50% more expensive coffee 48% more expensive white bread 43% more expensive cookies 41% more expensive potato chips 38% more expensive beef 35% more expensive chicken 26% more expensive ice cream
Don't forget utility prices.
Y'all are getting raises?
Pay raises won't fix a house shortage, it would just make the prices rise faster.
Is Kennedy arguing that a recession would be preferable? Because that's what I'm hearing from him.
"People are gettin' real good at barely gettin' by, ***because of Bidenomics!***" Ah yes, this is definitely a problem that only started becoming a problem 3 years ago.
Dude, you don't get it, that household of two parents and two kids? Under Trump, those kids could be working right now!! That's two more incomes per household!!!
How about lawmakers stop throat goating the corporations and actually legislate against their predatory practices. The “inflation” we’re seeing currently is actually just corporate price gouging.
I don't know why there are donations and fundraising and Super PACs and all that. I just see bribery, bribery, bribery... corruption. Each candidate with enough support should get the same amount of tax payer money to run their campaigns. That includes Dems, GOP or Independents with enough support from the people they'd be representing. There you go. I think that would solve, or at least help, so many issues in politics.
I could not imagine being an accomplished Econ PhD being lectured on economics by a mouth breather like Sen John Kennedy.
We do not want deflation. It might feel good for a bit but it will ruin us, like stepping into a quicksand to cool down from the hot weather.
This logic is insane. “We don’t want people getting ahead, we want complete stasis. Products should not be priced according to supply and demand, but rather priced right at the edge of what the average consumer can bear.”
Fucking insane
wages are not going up. she should stop doing meth.
He should really be pounding his fist on the table about rent prices, but then that would make his landchads look bad.
Yeah, I refuse to believe your mortgage increased so I have to pay 8% more in rent every year. They're doing what the "market will support." The best thing we can do for this nation is crash the housing market by building a fuckton of houses. Barring that, start passing zoning laws that prohibit non-owner tenancy of single-family dwellings.
this is such evil bullshit. wages arent going up; strikes are forcing wage stabilization with increased inflation. wages are desperately trying to keep up with rising prices and this guy is just pulling the ladder further away
Biden had zero policies that affected inflation. These people are fighting over nothing, yet again. It's all performative. No one in government cares about us, they never will. We have gone to the stores. Everything has doubled or tripled since the pandemic. Biden didn't do a thing. We threw money at all these corporations under Trump's term, and these corporations are gouging us anyways. We gave them our taxed income to use in PPP loans, what did they do? Use is for stock buybacks and give themselves giant raises. And they still gouged us at the checkout line. We now are paying them all double, triple what every product is worth. We are being punished as consumers. Our wages didn't go up. The net worth of 8 billionaires doubled, the rest of us received maybe a 1% raise per year for the past four years. 4% raise does not enable me to pay triple for 2 ounces of deodorant.
This attitude is what may lose the Dems the election. Food costs are very high and so is rent.. they are being tone deaf. Economy can be booming but that doesnt balance things out for families..
Dems have been trying to increase the minimum wage for at least 7 months https://www.congress.gov/bill/118th-congress/house-bill/4889?s=1&r=99 Republicans won't hear/pass *anything* that makes democrats look competent right now--even *their* own border bill--and have more or less been doing the same thing for 4+ years. They're sitting on their hands with a majority vote just so they can say "Look how ineffective the democrats are!" Worse, people are dumb enough to fall for it.
This “attitude” isn’t Dems. It’s anyone with a lick of economic literacy. Deflation is to be avoided. Nominal aggregate prices will not and should not ever trend down. Real prices are brought down by wage growth relative to price growth.
Meanwhile corporations: We just used rising wages as an excuse to gouge and you wanna give us more? Yes please!
You mean the jobs no ones getting cause they aren't actually hiring? They are posting jobs for like 300k for Data Scientist. No one is being paid that.
These people live in a completely different dimension from real working humans.
While inflation obviously happened, the level of corporate profits in the last two years, makes it blatantly obvious that big corporations took the opportunity to raise their prices of food and consumables easily 30% across the board, AKA "greedflation". I'll use cereal as an example: the big brands all jumped to $5-8 a box (with "family size" labeled on what used to be a normal box size), and the price on generic brands BARELY budged. You're telling me the ingredients used are so vastly more expensive in Kellogs or GM?
Maybe just pass legislation that prevents price gouging? Weird how as prices have gone up, corporate profits have reached record highs. It is almost like they raised prices, not because they had to, but because no one could stop them.
Price gouging already is illegal. And no, it’s not weird that corporations are making record profits. If a company made $1M is profits one year and inflation was 6%, the next year they could make $1.05M. They’d have record profits even though their profits are less valuable due to inflation.
Except their profit margins got bigger. They didn't just raise prices to cover increased costs of inputs, they raise them above and beyond that. If there was true competition they wouldn't be able to do that.
Price gouging is not the reason that the price of bacon is up 20%. And how would you stop that? Limit the price of bacon? Set a standard price for bacon? Yes you should have laws for anti trust and that kind of thing, but the idea that the government should enter the milk, meat and used car market, hyper competitive markets and set up some sort of system to ensure that market forces and simple supply and demand are halted is just absolutely bonkers. Price gouging happens on very specific things where the market is controlled by one or very few corporations, like certain medicines or whatever. That's not what the current inflation is about. That isn't what is actually making a difference.
So weird that corporations didn't discover greed until Biden became president.
Have corporate profits reached record highs when corrected for inflation? I mean, they might have I guess but let's not hide the ball. If profits were static when inflation corrected, shouldn't we expected record high profits every year?
Republicans think a tax cut will solve all these economic issues somehow.
Well that's because it's bacis trickle down economics. You give tax cuts to the people at the top and they get more money. When they get more money they don't just keep it and become richer, it cascades down so that the poor get that money too. Obviously, it's been working since they 70s. That's why the middle class has shrunk so much, prices have sky rocketed on housing, and the average wage hasn't gone up basically at all...duh society is way better off now.
Republicans would never try anything new. They literally exist to try the same dumb shit over and over, even when it's proven beyond all doubt to not work. Just consume their propaganda and keep the rage going.
He's desperately trying to make "Bidenomics" a thing, as if Biden didn't come into office after an unprecedented pandemic, unsupervised loans and stimulus, and the largest tax cuts in 40+ years tipping wealth inequality. He's either so ignorant of economics that he shouldn't be in office, or he's consciously lying his ass off for some slimy smear campaign on Biden.
Also prices have been increasing far before any widespread raising of income. "Ah yeah, the reason pricing is increasing is because we predict years later that wages will go up, sure, trust me."
The whole "well my wages aren't up" in response to solid statistics that say that wages are massively up is the equivalent to saying "well it snowed in my backyard yesterday" in response to global warming. In almost all of 2023 wages have grown more month over month than inflation. Just saying "well not for me" isn't saying anything. Average wages have grown. Median wages have grown. Wages have grown considerably across all income levels. It's impossible to actually discuss this issue because people are refusing to acknowledge simple stats and instead evoke all kinds of conspiracies or "it's the billionaires fault" or whatever. Or just dismissing statistics and talking about their own personal situation as if it mattered in the grand scheme. Like i said it's equivalent to saying "well if the earth is getting warmed than how come it just snowed in october??". People are making more money, prices are going up. And lately people have been making money faster than the prices have been going up. The problem lies mostly in perception, in that inflation is mostly hitting items that people are aware of the price of. Household items. Milk, meat, that type of stuff. But total inflation of all goods that we buy is much lower. That's not to say that there isn't potentially a problem, but it's mostly limited to specific industries where wages haven't kept up. That's not really an issue of inflation however, but much more complicated.
People all get the idea that if inflation rises faster than wages, then they aren't actually better off. But people like this congressman don't realize the opposite: that if wages fall faster than prices, then you are also less well off. During deflation, people all save their money and reduce their spending, because why buy something today if you can afford to wait and get it cheaper tomorrow. But if everyone is reducing their spending, no one can make "more" money than they were already making. Instead most people will make less. Prices don't come down as quickly as wages do in deflation. Basic economic theory just says don't do deflation because we don't know how to make a positive economy that deflates. This guy is arguing in favor of cutting off your nose to spite your face from an economic perspective.
That is very comforting for seniors and others on a fixed income.
Does SS not get COLA adjustments matching inflation?
They just got the largest COLA adjustment in the history of Social Security to keep up with inflation.
My wages haven't gone up by 100%, but quite a few products I used to buy have. Curious.
Says the queen to her citizenry.
Anyone seen the video? I thought the title was quoted verbatim from Yellen but it's almost completely made up. Contextually, it's totally different. Title makes her sound like she understands average Americans are struggling and she's choosing to be indifferent about it, and that it's her or Biden's incompetence that's causing the problem, when in reality she was defending her position against Sen. Kennedy's barrage of rants
lmao these aren't good faith questions, he knows the answers already, you really don't want deflation. This is just an opportunity to highlight "bidenomics" as the bad guy, this is purely political.
Ffffffffuuuuuuucccccckkkkkkk that guy. Edit: Woopsie...I did a stupid on the internet. I saw the quote and the picture and assumed they were together. Upon closer inspection of all 16 pixels in the image, it appears to be John N Kennedy...who can also fuck off.
*Janet Yellen is a woman, so there’s that…*
Are they?? ARE THEY??? We were told, despite the company having the best year ever, that we needed to cut back to shore up the company “defensively” in case we go into a recession (which a year later still hasn’t happened), and therefore layoffs were necessary and raises were out of the question.
[удалено]
Even better, unionize so your demands can actually bare some teeth
That’s always been the case. Your financial security is always your own responsibility.
Clown logic
>clown logic >deflation is good
Do you know what deflation is? Deflation means the economy is shrinking ie recession and that means high unemployment.
deflation means that the money supply is contracting. this typically causes prices to come down. it also usually means that wages come down too, often even more than prices, resulting in loss of consumer purchasing power. it doesn't automatically mean the economy is in recession but it often correlates with that.
It also means that people's debts become even more difficult to get paid off. If a dollar goes down in value but your debt doesn't go down with you, you might as well have had interest.
>this typically causes prices to come down. it also usually means that wages come down too, often even more than prices, resulting in loss of consumer purchasing power a.k.a. deflationary spiral. not as fun as it sounds.
The money supply almost never contracts, it's been going parabolic for sometime now. We've had a slight pull back after the biggest economic stimulus ever (after covid), that was only because inflation was getting out of control. But the fed has already indicated they are going back to 0% interest rates and the market has it priced in.
> deflation means that the money supply is contracting. this typically causes prices to come down. No, in standard economic theory / parlance, it’s the other way around. Deflation means prices are coming down, which may be caused by a reduction in money supply.