Inflation and the free market

https://www.wsj.com/articles/us-inflation-consumer-price-index-january-2022-11644452274

One of the rules of a free market is that when demand outpaces supply, you get to raise your prices.

We have been under supply shortages for 2 years now.

How is the rise in prices Joe Brandon's fault, when that is just the natural course of events in a free market?

(And for the record, I am not a Brandon supporter).

1. Shutting down the pipeline from Canada to the US created a shortage of supply of fossil fuel. That was on Joe Biden.

2. Paying money for people to not work created a shortage in labor. That is on Biden.

3. Vaccine mandates on Truckers kept the California ports backed up, that created shortages. That is on the Democrats and Biden.

4. Massive trillion dollar bills printed money at a rate far greater than anything we have ever seen in the US. One way to get inflation is a shortage of goods, another way is to have a surplus of dollars chasing those few goods.

Biden's administration has done both. Printed money like it was the end of the world while creating shortages in fuel, labor, and truckers.

There is no free market. Demand has outstripped supply for a number of reasons, including government money printing. When supply of goods is limited, such as housing stock, and money is plentiful with low interest rates, an auction takes place and the prices go up. Tesla cars keep going up in price because they can get away with it. Tesla also has to recover the cost of building new factories to keep up with demand.

If money was hard to borrow, there would be less bidding for scarce resources. Government policies have a significant impact, for better or for worse.

1. fair enough, I'll give you that one. Caveating the fact that we ought to be getting off the fossil-fuel thing anyway.

2. Half a half of a point. You go try to live on welfare. I know people who have, and it's a level of life I don't care to live. Doubt you would either. Nor did all those laws go into effect in just the last year. And, ever since the republicans put saint Reagan in charge, the average worker has more than tripled their productivity while they've seen no meaningful increase in compensation. Meanwhile executives, who's productivity has decreased, have seen their pay skyrocket to obscene levels. I've heard people say they're not working because it's just no longer worth it to struggle 40 to 60 hours a week for slave wages. I mean, back in the late 80's a father could work one job selling vcrs and afford a nice house, nice car, health care, and a vacation while mom stayed home tending the kids. Now both spouses work 2 jobs, live in a cracker box, and have to decide between if they're going to eat or get their kids medicine. I'm glad I'm retired, I wouldn't want to work in this environment either.

3. half a point again; I don't see "my personal rights" over-ruling 'love thy neighbor' as most of the world has. Funny how me-me-me was originally a liberal teaching, but the right has glommed onto it big time. If people thought of and did the right thing in putting others above self, half the reason for mandates wouldn't be necessary. And have you seen the ports of LA? There's no shortage of trucks waiting to be loaded. We drove from LA to Minnesota via Oklahoma and there's no shortage of trucks on the road either, I doubt you could fit many more in. Traffic flows grind to a halt in the middle of nowhere just because of the overload on the roads. Trains were all doubled and tripled up too. The problem isn't a shortage of chain, it's that we all have become excessively greedy and needy and wanting and careless and have become gross over-consumers. But no one wants to face that.

4. LOL, it's funny how deficits only matter when it's the left doing it. Uhm... yer boy trump contributed a HUGE portion to the deficit and the need to print money. And it's the right that passes policies taking money out of the hands of tax paying workers and putting into the pockets of tax-dodging fat cats (and that includes corporations too). So no point there, the right is just as guilty as the left for that one. If not a hair more.

satan is having such a field day, playing the right against the left and the left against the right blinding both sides to their own culpability.

The problem lies at the feet of all of us.
As consumers we continue to buy more than we need and often what we do not need.
We are not satisfied with just having our needs, we always want more. More than our neighbor.
If we cannot afford it, we just charge it often with no hope of paying for it.
Of course the manufactures, banks, and elected officials take full advantage of our foolishness to add to their own wealth.
In the end all will lose.
Best that we all walk away from this madness as much as possible.

First of all there is no "free market" any more. So what makes you think these shortages are "natural"? Prices have risen because of foolish and harmful decisions on the part of governments to damage economies and supply chains, while either suppressing or banning the free flow of goods, interfering with the value of currencies, and many other factors.

You seem like a very kind and empathetic person.
Those are wonderful traits, and we should all aspire to more kindness and compassion in our own lives.

However, although it's good that we're WILLING to take responsibility for problems we've caused...
that doesn't automatically mean every problem IS a problem we've caused.

Such is the case with nationwide inflation.

Individual "consumerism" is not what causes nationwide inflation.
Inflation is caused by a disparity between supply and demand... and it has to be on a very grand and systemic scale.
(If we all get greedy and want a better smart phone, that makes the price of smart phones go up, a little. But it usually doesn't make them go up that much, and it doesn't make everything else in the whole country go up. Foolishness at the level of the individual consumer only has moderate and segmented impact on the nationwide price of goods. This is what history shows.)

Nationwide inflation usually occurs when governments do something to create a systemic imbalance. Perhaps they've printed too much money to throw at problems, or their central bank has released too much money into the economy... it's usually something very large and systemic.

This is what history shows.

So how should that affect our individual guilt?

Nationwide inflation doesn't occur because an individual, or even a lot of individuals, got greedy and wanted a new smartphone they didn't need.
You don't bear responsibility for a problem you didn't cause.
Nationwide inflation is usually caused by grand systemic economic imbalances caused at the level of the government or central bank.
CONCLUSION: We don't bear individual guilt for a governmental systemic issue if we didn't CAUSE that governmental systemic issue.

(We might bear some guilt for voting in politicians that are economically inept, or for supporting bad economic policies. But we don't bear guilt for a runaway economy if the worst thing we did was buy a couple things on amazon we didn't really need. That doesn't cause inflation.)


I'm not trying to be unkind or argumentative; I'm just stating what history shows.
We all have more than enough guilt for the things we HAVE done... we don't need any extra.
: )


Take care, and I hope you have a wonderful week.

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Inflation is simply the thief sneaking in to steal your treasure.

Luke 12:33 Sell that which ye have, and give alms; make for yourselves purses which wax not old, a treasure in the heavens that faileth not, where no thief draweth near, neither moth destroyeth.

Put your treasure in heaven and you don't have to worry about inflation.

I respectfully disagree.
The people put the politicians in office over and over.
People do buy what they do not need or more then they need.
People do use the easy credit offered to buy what they cannot afford.
A few of us are willing to just say no, put the item down and go without, but most will not.

Correct. Governments are essentially thieves and robbers. The first option is to steal through taxation. The second option is to steal through inflation. And the money is never used for the general good. It always goes into the pockets of the politicians and special interest groups.

The whole idea behind crypto is to keep the thieves from stealing your money. This is why you know they will outlaw crypto.