Deflation Never Happens, Except Right Now
Deflation Never Happens, Except Right Now
Walmart, McDonald’s, and Ikea are all reversing some price hikes, but the trend is far from universal.
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Conventional economists spinning deflation as "almost always bad" has always felt like pro-corporate voodoo bullshit to me. Especially when the inflation that proceeded it was driven by boardroom greed and pathological profit-seeking.
I'm not saying deflation is always good. But right now it would likely just be a correction back to the usual Reaganomics greed instead of the post-pandemic let's-burn-it-all-down levels of greed.
This deflation from the bumpy COVID, supply chain, and corporate greed is good. But sustained long term deflation is very bad. The easiest way to explain it is basically everything runs on debt. If your revenue keeps going down but your debt is fixed, your debt effectively grows and the company is fucked. Same thing on a personal level if your wages go down and your mortgage is fixed.
Even without debt, sustained deflation is a sign the economy went to shit. Prices go down when there's no one buying, if there's no one buying companies close, people lose jobs, which causes other companies to go bankrupt and so on. Debt is the icing on the cake. People that think that long term deflation and deflationary policies are good never went through one.
The Apple II sold for $1298 in 1977. You can buy a mac mini for $599 today. Deflation is real in some markets and we are just fine.
Keyword in some markets. And in that case driven by efficiency increases in comparison with the rest of the economy.
Yeah, inflation is kinda good way to incentivise getting loans and mortgages as early as possible because you know that you'll never be able to save that much money as they get cheaper and cheaper. So, does everything run on debt when there is inflation, too?
Per the article deflations caused people to put off making larger purchases such as house because they'll wait for prices to fall. As opposed to inflation when people put off large purchases such as houses because they cannot afford it with out saving longer.
It's about protecting capital. The government literally ensures inflation so that accumulated wealth doesn't decrease because profit is more important than you surviving.
Anyone that believes their survival relies on capitalism has been sold the narrative that benefits only those with wealth. Some are convinced that owning a billionth of a percent of the market makes them part of the game; like a younger brother handed a second controller that isn't hooked up to the system.
like a younger brother handed a second controller that isn’t hooked up to the system.
I'm definitely remembering that one.
Best comment here imo
Still the same level of greed. Just all the juice had been squeezed from the lemons.
I think most things economists say is pro-corporate voodoo bullshit. It's a social science, they're the priests of the ruling class.
Well said. "Just ETF harder, bro!"