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/liberty/ - Liberty

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WARNING! Free Speech Zone - all local trashcans will be targeted for destruction by Antifa.

File: 4940d873f214ff3⋯.png (59.33 KB, 595x404, 595:404, ClipboardImage.png)

 No.93541

Does an increase in wages as a result of a lack of workers cause inflation when the workforce participation rate and the purchasing power of the average consumer is so low and illegal immigration is present?

 No.93546

>>93541

The lack of workers is not your main symptom to look at and illegal immigration is only a small patch on a gaping hole of a market. What matters is what produced the disparity in the first place. An increase in wages where, anyway? If the wages increased universally across the entire market, it was to adjust to the inflation rate, not cause it.


 No.93550

>>93546

The argument in various articles recently seems to be that there "aren't enough workers" in the workforce for the economic growth the US is experiencing, thus employers will have to raise wages in order to attract skilled labor which will be inflationary as they are doing so not due to increased productivity and that will lead to an increase in costs down the line.

Tied to this is a discussion of a paradox that despite the low unemployment rate there hasn't been an increase in inflation. Since labor force participation hasn't recovered since the recession, it seems like the unemployment metric is unreliable and there is a larger base of available workers (legal or illegal) to fill the positions than assumed so the "firms have to raise wages to attract workers" argument doesn't seem to be true; second, even if they did so the impact would not be as significant as believed as the buying power of the average person hasn't increased for years and there are fewer people working, so they aren't going on consumer credit binges and driving up demand for goods and services and there's no reason to increase prices when people aren't spending en masse.

How this all gets interpreted by the Fed affects their decision to change the interest rate, and if they think inflation is going to be an issue they'll keep hiking it until the economy crashes. However they kept it at zero for years and kept pointing at the low CPI inflation (because no one could afford to spend) as justification for their policy and that seems to have caused a massive asset bubble in multiple places such as the coastal property markets and probably technology stocks that doesn't seem to factor into their calculations. The economy hasn't really recovered, all the cheap loans just went to the big banks' circle of preferred borrowers and overseas in China and India. The massive difference between how a few major companies are doing and the rest of the country makes this a catch-22 situation where somehow they have to raise the rates to kill the bubble but not raise the rates too much to kill the economy (unlike in the past) and encourage reinvestment, if the Fed is smart enough to do that.


 No.93551

>>93550

>The argument in various articles recently seems to be that there "aren't enough workers" in the workforce for the economic growth the US is experiencing

If there "weren't enough workers," the growth wouldn't be happening at all, because if there weren't enough workers firms couldn't produce at the increased output. Growth is much larger than it should be (namely larger than than what consumption is going to end up being), this is true, but it has nothing to do with the labor force and everything to do with the Fed keeping interest rates at near zero for the last ten years. Artificially low interest rates means easier access to loans, which means more investment and more capital growth occurring (including more hirings) than is sustainable in the market, because there was no corresponding decrease in time preference by savers to match the increase in investment. The only reason anyone would claim there "aren't enough workers" is to justify useless government spending programs to "create jobs."

>Tied to this is a discussion of a paradox that despite the low unemployment rate there hasn't been an increase in inflation

Phillips Curve is a spook. It was thoroughly disproven in the 70s when stagflation hit. Keynesians have tried unsuccessfully to explain this away because their entire process is tied to the Phillips Curve and relations like it existing, because they want to put on their central planner hats and "fine tune" the economy.

>How this all gets interpreted by the Fed affects their decision to change the interest rate, and if they think inflation is going to be an issue they'll keep hiking it until the economy crashes.

Again, the crash is going to happen because interest rates were at near zero for the past decade. The earlier the Fed raises rates the less buildup of unproductive capital there will be, and the milder the ultimate crash. High interest rates are good because some of us actually save our money instead of taking out dozens of loans for shit.

>if the Fed is smart enough to do that.

As a general rule, the Fed doesn't make decisions intelligently.


 No.93555

File: 9256cdccf936cb6⋯.png (221.99 KB, 693x366, 231:122, ClipboardImage.png)

>>93551

>but it has nothing to do with the labor force and everything to do with the Fed keeping interest rates at near zero for the last ten years. Artificially low interest rates means easier access to loans, which means more investment and more capital growth occurring (including more hirings) than is sustainable in the market, because there was no corresponding decrease in time preference by savers to match the increase in investment.

That's what I was looking to confirm because the growth doesn't make sense from the lack of consumption.

>The only reason anyone would claim there "aren't enough workers" is to justify useless government spending programs to "create jobs."

I think the main target of their argument was to justify increased immigration against the policy of the Trump administration, their useless government spending program through affirmative action student loans is already in crisis.

>Phillips Curve is a spook. It was thoroughly disproven in the 70s when stagflation hit. Keynesians have tried unsuccessfully to explain this away because their entire process is tied to the Phillips Curve and relations like it existing, because they want to put on their central planner hats and "fine tune" the economy.

That was another thing, the Fed and public finance academics seem to keep using the Philips Curve as a tool for plotting policy when it hasn't worked for decades.

>Again, the crash is going to happen because interest rates were at near zero for the past decade. The earlier the Fed raises rates the less buildup of unproductive capital there will be, and the milder the ultimate crash. High interest rates are good because some of us actually save our money instead of taking out dozens of loans for shit.

From the perspective of some the Fed is raising the rates already too late in the cycle to be effective, but in order to prevent this from happening again shouldn't the Fed try to adopt a natural interest rate policy to keep monetary policy stable? Some detractors in the media argue it would create uncertainty in the marketplace because investors wouldn't have the predictable boom-bust cycles the Fed causes whenever it raises interest rates too high allowing them to pull their money out and buy after the market crashed, but that seems like a justification of the interventionism rather than based on actual sense, since when was the market supposed to have certainty?

High interest rates would be solid in periods of growth and reigning in inflation but since the Fed has been intent on fucking with the markets constantly for the past four decades consistent growth seems doubtful and they've always preferred inflation over stability for fear of a deflation that's never happened. A big reason for fiat's existence at all also seems to be for a currency that's more liquid than a gold backed one and high interest rates would be counterproductive to achieving that goal from the point of a central bank.


 No.93666

File: 7707601d54eb9d9⋯.jpg (54.62 KB, 638x479, 638:479, mc-afee-econ-data-6-638[1].jpg)

Wage led inflation happens when wages rise faster than productivity.

What influences wage rises is workers' bargaining power.

That depends a lot on things like the welfare system and union strength.

As these have been weakened in core countries in recent years you can see workers' share of output is around its lowest levels ever recorded.


 No.93680

File: 99b32bca15abaac⋯.png (23.27 KB, 300x301, 300:301, a7cc8a3c656f66ef0b272eab73….png)

>>93666

You again posting your stupid retardation, leftyshit? Nobody is taking seriously the shit you try to shill in here. Nobody cares about your brainless blabbery around democracy and turning everything to your perverse misunderstanding of work. You are incapable of even understanding what inflation is, which is why you make up something that stupid. You are a fucking braindead illiterate retard and will always be a laughing stock of a failure you and other useful idiots like you have been and will be.


 No.93701

File: 409e4e8bac2a3e3⋯.png (501.57 KB, 869x931, 869:931, 13425356766857656772.png)

>>93666

>Wage led inflation happens when wages rise faster than productivity.

>Wage led inflation

Oh fuck that hound doge should get paid more wages because obviously the doge worked harder than than the cop . Maybe if we can get more hound doge to do their job, this will kill inflation because the doge is more productive.


 No.93718

Inflation is occuring even though 99% of wages have stagnated. The money is going to the top 1% who keep squeezing us.


 No.93719

>>93718

True, but wtf are you going to do about it in a fiat system where the government literally just prints money to hand it out to its cronies?


 No.93724

>>93719

It really gets me how we've reached a point where everyone from the commies to the fascists to the libtards are shitting on the fiat system.

…and yet here we are. We still have it.


 No.93732

>>93724

>from the commies

They either don't know what fiat is or equate it with any currency

>fascists

Eh, not really. Even if some individuals are indeed somewhat redpilled, which is not the case for most of them as they follow commies in that regard being slightly less delusional because of naivety, if they ever come close to power they'll gladly use it for reasons below.

>libtards

Unless they are leftists they are so normalfaggy they don't know shit or heard about it from Keynsian or commie in colledge.

>and yet here we are

It's just a great tool for government to empower itself, even better than taxation, albeit less precise.


 No.93745

Inflation in the US was ~20% in the 70s, now after the Fed printed 10 gorillion inflation remains around 2-3%.


 No.93752

>>93724

Surprised about the fascists; it'd seem to fit right in to the "state as all" thing.

>…and yet here we are. We still have it.

…and the US government has been pulling about an 80% disapproval rating for about half a century now. Still have that, too.

Ditching fiat is easy. It also requires bankrupcy, being judgement-immune, and having nothing meaningfully worth stealing, NOR maliciously worth destroying. Because if you barter for an iPhone, they will fiat your iPhone as a fungible alternative to currency.

How hardcore are you, and what kind of temperate climate do you live in that you can stroll around naked and eat uncooked dandelions?

>>93732

>commies don't know that if you convert to local manufacturing with a gift economy that everyone ends up homeless and arrested because of the specific structure of the fiat system.

Lol, no. Fiat is the only rational argument for UBI, in fact, for that reason. And no, UBI isn't communism in case you're confused, it's just taking the cronyism out of fiat.


 No.93754

all money is created by fiat, it's not a natural resource.


 No.93757

File: 0b2e8bdfef2b06d⋯.png (98.25 KB, 370x210, 37:21, 0b2e8bdfef2b06d8ef9ecddf93….png)

>>93680

>getting this boothy bothered at econ 101

dude read a book


 No.93763

File: 610647625488441⋯.png (208.12 KB, 542x542, 1:1, advanced economic.png)

>>93754

All natural resources are created by fiat.


 No.93764

>>93754

Maybe you should READ some of that left literature, which has a number of far more natural monetary systems.

Liberty dollars, for instance, which are basically a function of mutual-credit banking.


 No.93776

>>93701

Yes you brainless turd, higher productivity means more goods being produced meaning lower prices. This is really basic shit you fucking retard.


 No.93785

>>93757

That's the most stupidly leftist thing one could say. Congratulations, you are the most brainless piece of shit that has ever raided this board.


 No.93791

File: a26530fab62d3ba⋯.mp4 (740.21 KB, 400x300, 4:3, toppestkek-.mp4)

>>93776

>give money to a dog

>productive


 No.93792

>>93666

Seriously, you don't know what inflation really is?


 No.93796

>>93792

It's not caused by money printing if that's what you think.


 No.93803

File: 76658ea7e4cc9ba⋯.jpg (35.74 KB, 777x704, 777:704, big_think.jpg)

>>93796

>increasing supply of money doesn't make each individual unit more valuable


 No.93809

File: ac579ca44831ca4⋯.jpg (28.63 KB, 525x481, 525:481, 1433195378842.jpg)

>>93803

>inflation is when money becomes more valuable


 No.93810

>>93719

Take the country back from the bankers. However that is a bloody proposition and no one seems up for the task yet we let congress sends millions of sons, fathers, and brothers to fight in overseas banker wars without blinking an eye.


 No.93952

>>93809

That was obviously a blunder. He meant this:

>increasing supply of money doesn't make each individual unit LESS valuable


 No.93955

>>93952

You are correct anon, but when the argument's come down to smug greentexting corrections like that don't matter all that much.


 No.94005

>>93666

this is due to globalization, not inflation


 No.94020

>>94005

learn to read dude




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