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This is called complexification. As generally understood, inflation itself is simply not a complex subject. Agree on some basic ground rules (such as that the CPI includes energy by definition), and away you go.
Quite true, which is why reasonable people bristle at the idea that it communicates much of anything to say "inflation". This is called "over simplification" .
The major problem with this theory is that it is completely bogus. The number of affected workers and the magnitude of typical minimum wage increases are simply too small to generate the effect imagined.
Sorry, no it isn't. The wage increase leads to increased cost inputs at all levels of the economy.
Yes ,if the personal exemption or the AMT does not go up as well or its understating the inflation rate.. Otherwise what it does is decrease private debt on any fixed rate. That includes all those middle class debtors on fixed mortgages.
Real inflation isn't a tax, or a price increase. If lobster goes up in price only because of "inflation" then how could it every be rationed? Real inflation is just a change in the nominal cost such that a dime store and a dollar store or essentially the same. However wage inflation cancels real private debt. That does not help the wealthy at all.
Of course what I don't want to see is this just happen all over again since wage inflation will just show up in rising asset prices unless they are held in check. Too bad going back in 2008 and letting the market seek its real price level isn't an option. The best way to cure too much credit is to punish lenders as well as borrowers. So far the one's punished the most had nothing to do with any of it since a dysfunctional financial system affects everyone.
Nope. Who is controlling the inflation rates? Inflation doesn't decrease private debt on fixed rates except for the time the inflation rates increase. Great if all that private debt is being retired but it won't be. What will get retired cheap is all the government debt. Everyone else is left holding the proverbial bag.
The minimum wage increase serves only to boost taxes, very little more. That extra few dollars isn't getting anyone out of a financial dependency upon government freebies. The store owner who has to pay his help a few more dollars doesn't raise his prices to make up for the small wage increase, they raise it above and beyond. So that newly found wage increase only means that the store clerk now pays his boss another 50 cents for the same bottle of whatever than he paid yesterday. Not only that but that store clerk now gets to do some of the other duties that remain from the other worker got got fired because it costs too much to keep both of them.
Lets be real about the minimum wage. If we are really so concerned about being able to "live" on a minimum wage, lets just go for $25 per hour and be done with it. Why not? Because we all know what would happen. This incremental nonsense to make feel good minimum wage increases is worthless, both as a means to enable people to live a better life and to accomplish any false idea that they obtain some dignity because they are getting paid more than the jobs are worth.
Who is controlling the inflation rates? Inflation doesn't decrease private debt on fixed rates except for the time the inflation rates increase. Great if all that private debt is being retired but it won't be. What will get retired cheap is all the government debt. Everyone else is left holding the proverbial bag.
Yes that's the point. That's how you get out of a liquidity trap; it acts as a one time debt forgiveness , essentially offsetting the debt when people though housing was the only way to save for retirement . It suckered them into going into debt for bogus equity.
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The minimum wage increase serves only to boost taxes, very little more.
Which one of us is going blind?
I qualified my statement:
Yes ,if the personal exemption or the AMT does not go up as well or its understating the inflation rate..
Then, to make a point , you pretended it wasn't. What's the deal?
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That extra few dollars isn't getting anyone out of a financial dependency upon government freebies. The store owner who has to pay his help a few more dollars doesn't raise his prices to make up for the small wage increase, they raise it above and beyond.
No , they just don't. Only when they have pricing power. Consumers can also reap a greater share of a consumer/producer surplus But so what? At least it is circulatory instead of creditor profits. One man's loss is another's gain for providing it...Creditors on the other hand just want to loan it out again. It also helps adjust prices.
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So that newly found wage increase only means that the store clerk now pays his boss another 50 cents for the same bottle of whatever than he paid yesterday. Not only that but that store clerk now gets to do some of the other duties that remain from the other worker got got fired because it costs too much to keep both of them.
Then I could quickly reject it by saying how I, along with others, do not take finance out of the equation as if it were some frictionless lubrication. I like Ricardo , but he was obviously covering for his bank buddies and he was most responsible for maintaining finance pays for itself.
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Lets be real about the minimum wage. If we are really so concerned about being able to "live" on a minimum wage, lets just go for $25 per hour and be done with it. Why not? Because we all know what would happen. This incremental nonsense to make feel good minimum wage increases is worthless, both as a means to enable people to live a better life and to accomplish any false idea that they obtain some dignity because they are getting paid more than the jobs are worth.
Yes lets get real. If a million dollar house must remain a million dollar house, lets just go ahead and make it a law. Why not? Why not lower credit standards and start the buying spree to a $2 million house? Then when the ridiculousness of a homeless person on a 60 year mortgage plan with a 3 year first payment deferral becomes all too apparent, lets create a minimum asset value law. Why not? Lets have the government print money to buy it. How about having a ready buyer of mortgages supported by da gubermnet? Oh wait a minute? That is real.
You do understand that the above are laws that specifically lower wages in real terms, yes?
The minimum wage hikes are a way to tax, is really is that simple. Over the past few decades the mumbo jumbo of financial wizards have left this country in nothing less than a shambles. Every time you turn around, there has to be something simple turned into complicated nonsense. Do the relative minority of remaining workers care? Not really, they are busy trying to cover the collective arses of the remainder of the population who see fit to cash a givernment check every chance they get and they can't get that, substitute some other benefit like a food stamp, a housing stipend, a free mobile phone, free electric service or something else that they neither pay for nor see any value in past their own instant gratification.
The minimum wage is a tax on the productivity, innovation and work ethic of every American who still gets up in the morning before 11am and hustles to work and then stays at work for more than 2 hours before having to run off to some family care issue, their latest therapy schedule or a 6 hour trip to the voting station not more than 2 blocks away.
We don't need some complicated explanation about anything, it isn't complicated. It gets complicated when wizards get involved and before you know it, working becomes an affront to human dignity and for crying out loud, since when should anyone be required to actually do anything in order to get something? Heck, lets just distribute the gross product of the working so that the non-working can express their rights to free everything.
When you are up to your arse in alligators, it is difficult to remember that the original objective was to drain the swamp. There are plenty of people willing to work to drain the swamp but the alligators of wealth distribution have made friends with the people who love to mind screw the simple into the complex.
The people calling for a hike in minimum wage and think it only applies to those workers need to think again. There are union contracts that are tied to the minimum wage, mandating an increase whenever the minimum wage goes up.
Then when the minimum wage goes up, SS costs to the employer go up, unemployment taxes go up since they are tied to wages, etc. However, the employer is also faces with increasing fuel and electric costs, materials costs, etc, all of which will increase beyond the current inflation rates as the wage increases roll in.
Conversely, there is a limit to the prices the employer can charge for services or product. As that limit is approached by the cost of labor and goods, the employer will lay off personnel, and embark on labor-saving activities (robotics, increased productivity, etc) all of which will reduce the need for labor as this is the easiest cost to control.
So the end result will be fewer people employed, but the politicians will crow about how they were helping "the little people" by increasing the minimum wage.
Pretty much of a meat-eater, then? Maybe you should go for some tasty hot dogs. Hot dog prices have declined by 1.7% over the past year. With meats though, you are talking about 1.1% of a typical family budget, slightly less than what goes to cereals and bakery products, the prices of which have been close to flat over the past twelve months. Meanwhile, the notion of "record high prices" means nothing in a percent-change world. One would expect ALL prices to be at or near "record highs" at the current time, whenever that was. And for what it's worth, I do probably 90% of the family food shopping and virtually all of the actual cooking.
Talking about food and inflation in the same sentence is nonsense. 50 years ago, food consumed 1/3 of the typical household budget. Today it consumes about 6% to 8 %. If your grocery bill is going up, it's because of non-food purchases like toilet paper, laundry soap, etc.
Where inflation has been galloping for the last 30 years is in major purchases, like education, health care, housing, clothing, transportation and insurance. In ALL of those areas, prices are at or near record highs.
Good God, printing money does not create inflation on its own. Its only when increased money gets in the hands of people who demand services. That's why inflation doesn't track the money supply nearly as closely as the Paulites and anti-Feds wish (in order to validate their crackpot ideas). Also, inflation is not a bad thing on its own AT ALL. We had several deflationary depressions from the 1830s to early 1900s, which is one of many reasons the Fed was created.
The Fed was created to give the wealthy control over the economy. And your spiel about money creation not causing inflation is a joke, theoretically if the Fed printed money and kept it in a vault, what you say would be true, but it doesn't do that it loans it "at interest" to the government and that money eventually finds its way into the economy where it increases the amount of money chasing needed goods and services causing inflation. Inflation is a scheme cooked up by bankers to perpetuate a system of wage slavery.
yeah, i don't agree with that if you want to oversimplify inflation for the sake of having a simple narrative ... that's certainly your right. but it isn't meaningful to me.
The originbal post was...
As generally understood, inflation itself is simply not a complex subject
You see, there are two parts to that, separated by a comma. You are trying to dispute the second while ignoring the condition established by the first. General understandings of inflation are basic at best. The general public has no handle at all on the concepts of categories, weighting, hedonics, or geometric means. They don't get owner-equivalent rent. They are technically wrong even for thinking that the CPI measures inflation. These wannabes don't see any deeper than the setting of a few rules and then following some established procedure somewhere. Some of them think it should still be the same one as was used in 1980. If you want to criticize over-simplification, criticize your unschooled fellow citizens who make sweeping proclamations about the CPI on the basis of no serious subject-matter knowledge at all.
The increase in minimum wage is a result of inflation and not the root cause.
The minimum wage should be indexed. Since it isn't, its real value begins to decline from the moment it is established. In real terms, you get paid a little bit less every day. Actual businesses already apply inflation factors to their projected costs of every other input. Why not minimum-wage labor? To those who rely on it, low-wage labor is as essential to production as chocolate chips are to a chocolate chip cookie maker. Allowances for rising costs for chocolate chips are factored in but not rising costs for minimum-wage labor. Why is that exacrly?
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Originally Posted by jimhcom
The root cause of inflation is the Federal Reserve and it's fractional banking system.
Pure poppycock. As it was in the beginning, is now, and evermore shall be.
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