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by Xenograph
1800 days ago
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Let me rephrase: this is a good thing as long as production is meeting or exceeding demand. When it becomes clear that there aren't enough hands on deck (or at desks, or in factories) to "keep the lights on" then we can say there's a problem. Until then, it's good for people to have more financial independence and be able to find a job that doesn't treat them like cattle. As you mention, this breaks down when you take it to an extreme (eg. 200 mil). But that's not where we are and nor is it where we're headed so I don't see the equivalence. |
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The first: For the past several months, I've been feeling the effects of supply chain disruptions in my normal purchases of consumer goods. Employment and production fell through the floor while demand in various things went through the roof. From that alone, I'd say we're approaching, if not already in the early stages of not enough hands on deck.
The second: I am probably misuing the word, but for lack of knowing a better one, I'd say there is a hysteresis between policy and other inputs which shape employment and production levels, and how acutely the positive and negative effects of employment and production levels are felt by the population, and the shape of this hysteresis curve is not well understood or characterized. That is to say, economic policy could be set such that production in fact will not meet or exceed demand, but the economy will not reach that state for a while, and we'll have a period where things seem to be just fine, until all of a sudden, holy shit, they're not, what the hell happened. So when inflation has been relatively steady over the past several years, and now over the past months we find ourselves in an increasing rise, perhaps we should start paying attention now, while policy inputs that are less likely to overshoot us into deflation are still an option.