Heard on NPR earlier tonight that the FED does not control supply side economics. This was a very purposeful misnomer. I do not know if it started with NPR.
The FED is monetary policy as we all know and that is the main tool of supply side economics as we all know. The NPR news reporter was citing actual toaster ovens and automobiles as supply and therefore as supply side economics the FED can do nothing about. A total bastardization of economics.
This quote I read just now by Wendy is further evidence of Orwellian screwing around on the unsuspecting…
“The Fed’s actions will have an immediate impact on asset prices. But the impact on consumer price inflation will be much slower. Consumer price inflation is mostly affected by fiscal, not monetary, stimulus which is reflected in M1, the money in cash and checking accounts that consumers can spend immediately. M1 is still skyrocketing.”
Monetary policy is the reason entirely for the current inflation. Yes the pump was primed by fiscal stimulus, but the $120 billion per month of monetary stimulus by the FED is still in place. The fiscal stimulus is long gone. You can get much inflation at this point from the fiscal stimulus.
Fiscal policy of course being demand side policies.
Why this bastardization of reality? To find a way to protect the wealthy from a tax hike? Of course. He who controls the press can tax you instead of himself.
I can see a world where capital gains taxes on most of the folks on this board are much higher than capital gains taxes on billionaires. Guess what with the power of the press we have been in that world for quite a while now.
You can NOT get much inflation at this point from the fiscal stimulus.
The people who did NOT spend their stimulus checks can still drive inflation today–if they so choose. They may have to spend that money due to the sharp increase in prices the past few months. Low-income groups do not have the ability to set aside savings because they lack the consistent income high enough to remain current on their monthly bills over an extended time frame.
Heard on NPR earlier tonight that the FED does not control supply side economics. This was a very purposeful misnomer. I do not know if it started with NPR.
“Supply side economics” is a government wealth redistribution program; take money from working people, shower it on the “JCs”, then stand back and watch the “JCs” do what they want with it.
Inflation is being driven by the “shortage” narrative, and the ideology that all prices must rise to a “market clearing level”, rather than settling for an adequate profit. The Audi dealer in Sylvania, Ohio, has a Q3 on the lot with a sticker of $45,100. He is advertising it at over $69,000. One of the local Detroit TV stations ran a piece on the ten car models that dealers are demanding the most over sticker on. The gouges were $8-10,000 over sticker.
Steve…still using things that are 40-50 years old, with no intention of replacing them
“Supply side economics” is a government wealth redistribution program; take money from working people, shower it on the “JCs”, then stand back and watch the “JCs” do what they want with it.
Yes that is supply side econ. It started with Reagan’s need to recapitalize US corporations. Today it is not supply side econ it is pure corruption. There is a big difference.
When Reagan did it the middle class was not paying effectively more than the wealthy. While I do not have the exact rates in front of me by 1987 Reagan had dropped all pretenses of being honest with the tax code. He never dropped his sheen in public.
Yes a finance guy at the local Honda dealership, a friend of mine who let his anger go when I bought my last Honda for a lot less on Ebay hahaha, has confirmed the dealers purposely have empty lots at this point. Two week late on time delivery without fail. A lot less working capital is tied up and the story of chip and part shortages screwing the buying public.
While I do not have the exact rates in front of me <<
Economic Recovery Tax Act of 1981
The highest marginal tax rate fell from 70% to 50%, the lowest marginal rate from 14% to 11%. To prevent future bracket creep, the new tax rates were indexed for inflation. Also reduced were estate taxes, capital gains taxes, and corporate taxes.
When selling this, it was called an “across the board” tax cut, with the choreography of a hand moving in a straight horizontal line, to give the impression that everyone was receiving the same cut.
Look at the numbers. The JC “keeps” 20% of his money, and the burger flipper “keeps” 3% of his money. Doesn’t sound uniform to me. Tax cuts proposed or passed since then have always been a “uniform percentage cut”. What happens when you take a percentage of a percentage? The person in a higher marginal rate bracket receives a larger percentage point cut. And who benefited from the cap gain tax cuts? Working people didn’t have IRAs and 401ks then, so they were not in the market in a big way.
I heard it clearly stated by Jack Kemp, decades ago: words to the effect “rich people do all the saving and investing that is needed for capital formation, so they should have all the money”.
Major US corporations in the pension funds were holding US Treasuries often with a 2% coupon. The major corporations had to be recapitalized.
In 86 or 87 Reagan lowered taxes again just to screw the country for the rich. The same full of logic was given to the public. This will grow the economy, hogwash we had slow growth for four decades.
This will grow the economy, hogwash we had slow growth for four decades.
Looking at the accumulation of government debt, personal debt, and corporate debt, in place of savings, since 1980, I figure it’s an open question whether the economy actually grew at all.
We know what has happened to government debt over the last 40 years, and charts of consumers drawing down savings and accumulating debt over the same period have been posted before.
Here’s one for non-financial corporate debt, rising from about 32% of GDP in 80, to 46% of GDP in 2018.
Very good point the stats say we grew but the cost of the small amount of growth the US had was for the government to be a private overdrawn checking account for the wealthy. De facto we rolled back very badly.