Quote:
Originally Posted by Finn_Jarber
Economic miracle is a turning into an economic nightmare.
Why?
Real wage growth is -9.1% since Trump took office.
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You mean fancy mathematical acrobatics that manipulate data to get preconceived results, while simultaneously distorting the truth.
It's unfortunate, but your government has never once attempted to differentiate between the various forms of Inflation and it reports an aggregate of all types of Inflation, rather than breaking them down.
You have Monetary Inflation, Cost-push Inflation, Demand-pull Inflation and two others.
♫
One of these things is not like the others ♫...
That's a song from Sesame Street, and the great lot of you need to be watching that show to learn about life and why things are the way they are.
Monetary Inflation, Cost-push Inflation and Demand-pull Inflation have different causal factors, and because they do, there is no one-size-fits-all solution.
It's like a paper fire and a grease fire. Throw water on a paper fire and it goes out. Throw water on a grease fire and it doesn't go out...it spreads. You need a different solution, like foam or dust.
Inflation is like that, only different.
Monetary Inflation is caused by fiscal policies. The Laws of Economics say wages should rise, wages do rise, and there has never been any case throughout history in the entire World where wages have not risen in response to Monetary Inflation.
Your wages have risen and are rising in response to Monetary Inflation, except the rate of Monetary Inflation in your economy is negligible.
When the government reports an annual Inflation rate of 2.5%, only 0.3% to 0.5% is Monetary Inflation.
The other 2.0% to 2.2% is Cost-push and Demand-pull Inflation.
Fiscal policies can never affect Cost-push or Demand-pull Inflation.
The cause of Cost-push Inflation is your governments -- all of them -- city, county, State and federal.
You elect the people who enact taxes and regulations, which cause the prices of goods and services to increase, then you complain because the prices of goods and services have increased, and then you have the unmitigated gall to demand that your wages be increased to offset the price increases you told the people you elected to enact in the first place.
That's self-serving.
You elected the people who levied a regulation to use corn for ethanol.
That took corn out of the food market and drove up the price of food, because other than actually eating corn, corn products like corn starch, corn flour, corn meal, corn flakes, corn oil, light corn syrup, dark corn syrup, high fructose corn syrup and other products are used in nearly all of your non-corn foods and beverages, not to mention it increases the price of pet food.
Not only are you paying more for food, you're paying more for gasoline, because you use corn to make ethanol for gasoline.
And you want your wages to increase?
Wrong answer. That's not how the Laws of Economics work.
The right answer is to elect people who will eliminate that regulation and reduce food prices and pet food prices and gasoline prices.
You can use sugar beets, which no one eats anyway.
Sugar beets yield 714 gallons of ethanol per acre, compared to 354 gallons per acre for corn, and because sugar beets are 70% water, you only need 1.5 gallons of water to make 1 gallon of ethanol, instead of using the 2.5 gallons of water to make 1 gallon of corn ethanol.
And you have 35 Million acres of fallow farmland in Ohio to grow sugar beets, and 854 Million acres of fallow farmland across the US, so it's not like there's a shortage of land to grow sugar beets.
So, not only would you reduce food prices, you'd reduce pet food prices, and the price of gasoline, and you'd conserve water, unless your goal is to deplete the water supply in the US as fast as you can.
If you don't have the courage to elect the people who will do that, then suffer in silence.
However, the majority of your Inflation is Demand-pull Inflation.
Demand-pull Inflation is a built-in safety mechanism that protects and prevents resources, goods and services from being depleted, over-used or over-consumed.
It happens when Demand exceeds Supply, and housing is a prime example that everyone can readily see.
Wages are not supposed to rise.
Increasing wages to match Demand-pull Inflation causes prices to rise even higher and at faster intervals.
Ultimately, you'll reach a point where the resource is gone, or the goods or services are no longer available, or there is no possible way to increase wages further, at which point everyone is a loser.
There are only two solutions for Demand-pull Inflation: stop consuming, which is the primary goal of Demand-pull Inflation force consumers to stop consuming, or increase Supply to match the rate of increase in Demand.
The problem is that increasing Supply isn't always possible. Even when it is possible, it often isn't profitable.
That's where you stand with food prices. Since no one can operate at a loss, no farmers are entering the corn market. You have to wait until prices go higher and are at a break-even point, except few people are willing to operate at break-even, so you have to wait until prices go even higher, so that a profit can be made.
The same is true for housing. If you spend $1.5 Million to build a 12-family unit, you have to be able to charge a rent that will pay off the loan, cover the insurance, cover the property taxes, cover maintenance, cover the cost of water, plus generate a profit so that you have funds to start a new construction project to increase the housing supply.
So, in the end, if you're upset over "real" wages, then know that you have only yourself to blame.
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