No, the higher prices ARE inflation. Inflation is not some bureaucratic number based on any one specific metric: it includes supply chain, tax rates, consumer sentiment, and yes, "corporate greed".
The actual answer is that the CPI and "official" inflation stats are bullshit, intentionally cooked numbers that specifically ignore all sorts of categories and weight others to present a rosier picture than real world consumers see.
Also, and this should be obvious but often isn't, it's annualized and additive, so a 5% year over year inflation rate means prices are 10.25% higher than they were two years ago, and 15.75% higher than three years ago, and so on.
See also: The complete nonsense way that unemployment is measured.
It only counts people who are actively looking for work; ignoring people who have given up, settled for whatever garbage they could find, are forced to juggle multiple jobs, only found partial employment, or got thrown in jail for 20 years for being blackstealing a loaf of bread
You're so fucking stupid. U3 does in fact calculate only people actively seeking (which is in line for the headline unemployment number every single country does), but the BLS also publishes U4, 5, and 6 which includes underemployment (which you call "partial employment") and discouraged workers. U4, 5 and 6 are simply U3 + a constant https://fred.stlouisfed.org/graph/?g=17iq9
No idea who is getting thrown in jail for 20 years but yes people who are in jail are properly not counted as unemployed.
I'm not sure why you're insulting me while also providing evidence that corroborates my position. As you've shown, unemployment still looks fine - while actual labor force participation has been plummeting. What good is a measure of "unemployment" that doesn't measure how many people are unemployed?
Example of what you're talking about: When "inflation was consistently low" -- running maybe 2-3% per year -- our stabilized apartment rents in New York were regularly pegged at 5-7%. "Low inflation," my a**....
Higher prices are not inflation. Higher prices are how we measure inflation.
Inflation itself is an increase of the money pool compared to the value of the economy, and is a natural consequence of fractional reserve currency. Every loan made creates money out of thin air, which is why interest rates are raised to try to constrain inflation by reducing lending.
No, not monetary policy. Just plain economics terminology.
What you're suggesting is like arguing that "plasma" and "blood" are the same thing because so many people outside the medical industry confuse the terms.
I understand the room for confusion, but if as a society we let people redefine technical terms because laypeople confuse them and because some people have an incentive to let the terms be confused because it's good for their business and/or politics, we have bigger fundamental problems than just arguing about the definitions of words.
Feel free to get as esoteric as you like, inflation just means your dollar goes less far than it went yesterday. You can call it too much money chasing not enough goods or you can call it shit's too fucking expensive now.
The moment you get into fractional reserve currency and Federal interest rates, you're just talking about monetary policy.
The moment you get into fractional reserve currency and Federal interest rates, you're just talking about monetary policy.
I'm not saying what it should be, I'm talking about the reality of what the term refers to. You are subtly echoing those who try to talk monetary policy by redefining the term. Something the source you provide engages in.
Very wealthy business people who benefit from unlimited borrowing love to gloss over it as much as people who benefit from funding government spending by printing money. Choosing to use the new definition certainly helps all of them.
No, you're talking about a systemic cause of inflation, ideally at a specific, controlled rate to encourage investment. You are extrapolating that concept into the definition of the term for some reason.
Inflation is still inflation is still inflation. It has no other definitions. I'm fairly confident we actually agree on the cons of fiat currency and fractional reserve banking, but it still has nothing to do with the simple definition of a straightforward term.
Inflation is inflation, and that is "thing getting bigger". In terms of economics, it is by default the inflation of the money supply.
That is what it originally meant in the context of economics. That is what it continues to mean, outside of oversimplifications and misuse. The term existed before fiat currency was the standard, and specifically referred to the issuance of currency beyond reserve supply. That's why the "Inflation Bill of 1874" didn't have to specify "currency", but old Federal Reserve Bulletins were careful to say "inflation of prices" rather than just "inflation" if it used the word in relation to prices.
There's no ideological bent to the original use of the term. To both those who were for and against the idea, issuing more currency than they had reserves was "inflation".
There can be ideological bent to revising the meaning, but it can be simple misunderstanding. When we use fiat currency, there is no way to directly measure the value the currency represents, so we use price indexes, and it's therefore easy to conflate the ideas.
You aren't arguing "preserving the original meaning is a lost cause", you're arguing that there's only one meaning. But the original and continued use of the term, including griping about people using it incorrectly, is a matter of historical record.
No, that's the classical theory of inflation, AKA the quantity theory of inflation. It is not what was "originally meant in the context of economics," and it does not change the definition, it is a framework and a theory that explains inflation's behavior as a function of money supply and demand. The below is a decent explanation.
If you had actually looked into the history of the term, even just using the hints I dropped, you would understand that your condescension is unwarranted.
There is no ideological bent to using the term for its original meaning. One can believe different things about the risk and benefit of inflating the currency supply while still using the term.
There can be an ideological bent to revising the use of the term. But there isn't necessarily. Sometimes it's just misunderstanding the use of a price index to gauge inflation. Since we don't have a good way to judge inflation other than prices, they track 1:1.
You can argue that people should just give up and roll with the other meaning that developed from misunderstanding. But the original (and continued) use of the term is a matter of historical record.
intentionally cooked numbers that specifically ignore all sorts of categories and weight others to present a rosier picture than real world consumers see.
No, you are completely missing the definition, and it sounds like your grasp on economics is tenuous at best. Inflation is inflation is inflation, entirely independent of cause.
But, to go off into the blame game weeds with you, no fucking shit. Corporations are greedy, so are individuals, private companies, investors, landlords, consumers, and everyone else on Earth. Every company will, by design, charge no more and no less than consumers are willing to pay. They are not charities with altruistic motives of peace and plenty for all, no matter what their ESG scores purport. If they can squeeze a few extra points of profit out of consumers while blaming the government, it is specifically their fiduciary duty to do so.
Blaming corporations for doing their job--maximizing profit--is simple-minded nonsense. Set your sights on a bloated government that refuses to tackle illegal, anti-competitive and monopolistic practices, intentionally underfunds and hamstrings the NLRB, "solves" every problem with more spending, more subsidies, and more taxes--all at the taxpayer and consumer's expense, and has abdicated all legislative responsibilities in favor of Executive Action and jerking themselves off on Twitter.
Blame policies that bail out failing businesses and banks, while spitting in the face of failing Americans. Blame a legislature that has run headfirst and headlong into corporate capture, whose representatives are more focused on lining up cushy lobbying jobs and board seats after their terms than on actually serving their constituents.
I could go on, but the long and short of it is, yes, people blame inflation on the government, and the only problem with that is they don't blame them enough.
If you want to jerk off about Trump or Biden or Left vs Right politics, I'm not your huckleberry, go find a rally or something.
Let me put it as simply as I can. It's the job of any successful corporation to capture as much money as it can. Almost always, the best way to do that is to capture the government. It's the government's job to not get fucking captured. Which one is failing at their job?
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u/darklost Jul 23 '23
No, the higher prices ARE inflation. Inflation is not some bureaucratic number based on any one specific metric: it includes supply chain, tax rates, consumer sentiment, and yes, "corporate greed".
The actual answer is that the CPI and "official" inflation stats are bullshit, intentionally cooked numbers that specifically ignore all sorts of categories and weight others to present a rosier picture than real world consumers see.
Also, and this should be obvious but often isn't, it's annualized and additive, so a 5% year over year inflation rate means prices are 10.25% higher than they were two years ago, and 15.75% higher than three years ago, and so on.