As a working class female and small business owner you want to steal from me? How is that feminist?
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Replying to @RachelDTobias @nberlat
Small business owners are, by definition, petit bourgeois and not working class (the "petit" means "small" and the "bourgeois" means "business owner")
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If I didn’t get taxed and inflation off the rails I could climb the social class ladder
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Replying to @RachelDTobias @arthur_affect
inflation has been effectively zero for 20 years.
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Replying to @nberlat @RachelDTobias
The goldbugs aren't even satisfied with money staying flat, they actively want DEflation - i.e. they think they're entitled to just be given free money for already having money
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What’s insane is that so long as inflation is stable, the actual rate shouldn’t matter. Inflation is just the exchange rate between money today and money tomorrow. With a couple of assumptions (which aren’t true but hold on for a moment), what that stable number IS doesn’t matter
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Replying to @lawnerdbarak @arthur_affect and
If everybody knows that, due to inflation, $1 today will be worth $0.1 in 30 years, then the interest rate banks demand on mortgages will be high enough that the monthly payments over that 30 years cover the principal, inflation, and profit. What that inflation rate is?¯\_(ツ)_/¯
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Replying to @lawnerdbarak @arthur_affect and
what DOES matter is destabilization. If the bank & I make a 30 year nominally denominated transaction (ie a mortgage) when the fed says inflation will be 4%, consistently, and then a few years later the fed says “no actually 3.5%”, they just gave the bank a windfall at my expense
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Replying to @lawnerdbarak @arthur_affect and
And guess what. The fed did that REPEATEDLY. They called in”opportunistic disinflation”: they intentionally tightened monetary policy before the labor market recovered after each recession since the late 70s, kneecapping their labor market in order to lower Long run inflation
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Yup, Paul Volcker earned himself a lot of cookies for being a Good Little Banker giving a huge gift to creditors with the Volcker Shock in the 80s When I was in college they were still teaching this as a great act of political courage
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Replying to @arthur_affect @lawnerdbarak and
Yeah, though I will at least acknowledge that the sort of stagflation era was an unusual one, and it's not necessarily that Volcker made the right call, but it was at least justifiable in the moment. 2020 is not 1980, though.
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Replying to @mssilverstein @arthur_affect and
But we don't have to worry now about the theoretical case where the money supply is too large and having negative effects, because it's plainly too small and we can easily address that.
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