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jffrybt t1_it7x2z3 wrote

Reply to comment by hacksoncode in [OC] Inflation rate and nominal interest rate by giteam

> Today the problem is supply, not demand.

It is impossible to say this. Demand continues to outpace supply.

Did demand rise? Yes. Did supply drop? Yes. They are out of equilibrium. There is only one equilibrium created by both.

If there were fewer job openings than job seekers, I would agree that you could look to supply to fix it.

But more job openings than job seekers shows that the supply side sees unmet demand, is trying to meet it, but will not be able to catch up to demand. They cannot employ enough people to keep up with demand.

How can you have an economy that has more consumers than producers? You can’t. The result: inflation.

So in that sense, the demand side is the one that needs to addressed.

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hacksoncode t1_it7y3oi wrote

> If there were fewer job openings than job seekers

At current offered wages. The only way to fix that, ironically, is inflation.

>They cannot employ enough people to keep up with demand.

Not because those people don't exist, presently (as in Japan's case), but because of external factors.

But even if they didn't exist, though, the only answer other than "everyone just suffers" would be more automation... which requires... capital that high interest rates make scarce.

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jffrybt t1_it82ube wrote

Automation is its own supply and demand and growth limitations. You could flood it with capital, but if every company seeks to increase automation simultaneously, you won’t see an actual increase in automation. You’ll see an increase in the price of automation and an increase in job listings in automation.

Exact same position we are in.

Supply building is slow.

Demand is now.

And you can bet your ass companies are building automation. Long term job destruction is happening behind all of this.

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