Raising social involvement, self awareness and self improvement topics, because our communities are the sum of our personal beliefs, behaviors, action or inaction. Only "we" can improve our family, work place, school, city, country, etc.
Thursday, June 11, 2026
In Love with Inflation
I bet the people who voted for Trump to lower prices are very disappointed that he seems very happy with the high prices and inflation.
One upside to my broken ankle... I have not filled gas in anything for weeks !!!
Kind of returning to the norm for President Trump. Rich people don't mind inflation all that much. They don't worry about the price of eggs. Donald Trump's business success has always depended on rising property values, and an ability to increase rents. As a real estate guy, in huge debt, he will always favor lower interest rates because they push up property values, and they decrease the cost of debt. All these things have broader implications for the economy, both positive and negative, but what I point out here is that Trump isn't interested in those broader implications. What he is interested, and does favor is economic policies which benefit him personally.==Hiram
The problem with inflation is that it may make you feel wealthier because what you own is worth more dollars... But each of those dollars is worth less. :-O
Somewhere along we made the decision to politicize the issue of inflation. What that means is that our position on inflation related matters is dictated by our politics, our tribalism if you will, not by and understanding of what is actually going on. I like to think of my understanding of the issue is political but not partisan. My understanding is shallow, and pretty much what all political people used to understand and largely agree with. Inflation is a supply and demand issue. It happens when supply of money outpaces demand. The way to reduce inflation, to reduce the price of money is to lower supply, raising interest rates being one way to do it. Everyone used to agree on that.==Hiram
Inflation does have it's benefits. There is a reason why not crucifying mankind on a cross of gold is politically popular. In political economy, the basic way politicians think about political issues. higher inflation is linked to higher employment numbers, and politicians like high employment. Biden being weak and frail was unable to make the case for his economy allowing Trump to dominate messaging, but a more active president would have talked about low unemployment in his administration. Debtors like inflation because they get to pay back debt with cheap dollars that they borrowed in expensive dollars. Trump is getting political benefit from his policies which are intended to raise prices. The question is just how much political benefit he is receiving and at what cost. These are all issues worth thinking about and discussing, but now that this has become a politicized issue, we can't do those things.--Hiram
One upside to my broken ankle... I have not filled gas in anything for weeks !!! 
Kind of returning to the norm for President Trump. Rich people don't mind inflation all that much. They don't worry about the price of eggs. Donald Trump's business success has always depended on rising property values, and an ability to increase rents. As a real estate guy, in huge debt, he will always favor lower interest rates because they push up property values, and they decrease the cost of debt. All these things have broader implications for the economy, both positive and negative, but what I point out here is that Trump isn't interested in those broader implications. What he is interested, and does favor is economic policies which benefit him personally.==Hiram
ReplyDeleteThe problem with inflation is that it may make you feel wealthier because what you own is worth more dollars... But each of those dollars is worth less. :-O
ReplyDeleteSomewhere along we made the decision to politicize the issue of inflation. What that means is that our position on inflation related matters is dictated by our politics, our tribalism if you will, not by and understanding of what is actually going on. I like to think of my understanding of the issue is political but not partisan. My understanding is shallow, and pretty much what all political people used to understand and largely agree with. Inflation is a supply and demand issue. It happens when supply of money outpaces demand. The way to reduce inflation, to reduce the price of money is to lower supply, raising interest rates being one way to do it. Everyone used to agree on that.==Hiram
ReplyDeleteAn interesting read
ReplyDeleteInflation does have it's benefits. There is a reason why not crucifying mankind on a cross of gold is politically popular. In political economy, the basic way politicians think about political issues. higher inflation is linked to higher employment numbers, and politicians like high employment. Biden being weak and frail was unable to make the case for his economy allowing Trump to dominate messaging, but a more active president would have talked about low unemployment in his administration. Debtors like inflation because they get to pay back debt with cheap dollars that they borrowed in expensive dollars. Trump is getting political benefit from his policies which are intended to raise prices. The question is just how much political benefit he is receiving and at what cost. These are all issues worth thinking about and discussing, but now that this has become a politicized issue, we can't do those things.--Hiram
ReplyDeleteI think the FED's dual mandate is where the non-partisan line is drawn. And thankfully they are relatively apolitical.
ReplyDelete