aquarain t1_j18tcmt wrote
Reply to comment by mrpoops in Leaked internal document shows Amazon expects a soft landing for the US economy and little chance of a recession, a rosier outlook than many other forecasters by Sorin61
I disagree. With inflation approaching 10% and looking to get sticky the potential for a hard crash was there. The Fed was slow to react but seems to be on the money with the intervention. Having seen how they handle these things for a long time, such a measured response was never guaranteed. They could have hosed it up and they seem to have not, so far.
mrpoops t1_j18urtr wrote
We have full employment and wages went up some. If inflation is at 10% and wages go up 5% then the real world economic impact of inflation is only roughly 5%.
So…no. It wasn’t gonna crash the economy.
aquarain t1_j18y7kz wrote
What you describe is "stagflation". We tried it in the 80's and yes it will crush the economy. Also, 5 points is absolutely brutal to the poor.
mrpoops t1_j190dhn wrote
Yeah, it’s absolutely bad for the poor. But so is basically everything else. The world is bad for the poor.
Inflation isn’t good. But post-pandemic economic ripples and a war in Europe are the root cause. Not an underlying economic problem like 2007-2009.
aquarain t1_j193pht wrote
Letting inflation get out of control is absolutely an "underlying economic problem" that can take years of austerity to repair.
Your focus seems to be on conservative media blaming Biden for having to cure the economic problems that began and sprung out of decisions made before he took office. On that I agree. He was set up. Inflation had been rising and accelerating since May of 2020, before he was even elected. It was further aggravated by a great deal of helicopter money before he sat in the big chair. It's not his fault. And frankly getting inflation under control isn't to his credit either, except from discipline to not push for more stimulus in an inflationary economy. That job is mainly handled by the Federal Reserve and he didn't appoint them. But Presidents get credit or blame for the economy anyway.
It's definitely post pandemic ripples and war in Europe. And QE+ZIRP. We seem to be transitioning to more of a saver economy now than an excess credit consumption one. I think long term that's best for everyone.
mrpoops t1_j196q94 wrote
Sounds like we mostly agree. Merry christmas dude.
thedaidai t1_j18xhbm wrote
Except higher wages tend to fuel acceleration of inflation. Yes, it absolutely could have.
EDIT: lol at the downvotes. It's called the Wage-Price Spiral. Look it up dumbasses it is a very basic macroeconomics concept
standarduser2 t1_j18wkz0 wrote
Inflation is not approaching 10% in the US though.
aquarain t1_j18xm1n wrote
True, it isn't. But it was. It peaked at 9.06% yoy in June as the interest rate hikes beginning April started to have an impact.
https://www.rateinflation.com/inflation-rate/usa-inflation-rate/
standarduser2 t1_j19f1bd wrote
Approaching makes it sound like actively rising to 10%, which is factually untrue.
Keep down voting and spreading misinformation if you like.
aquarain t1_j19hqzj wrote
On an annualized rate June would have been 10%. You don't go from 7.5 to 9 in 6 months, from 5.3 the year before, from 0.6 the year before that without realizing that this is a trend that leads to 10 and far beyond.
standarduser2 t1_j1af7wj wrote
At what point do you believe the US will be far beyond 10% annual inflation?
aquarain t1_j1ahnrq wrote
I think I see your objection. It's the grammar time machine.
>With inflation approaching 10% and looking to get sticky the potential for a hard crash was there.
The placement of that "was" makes it difficult to tell that the former tense applies to the clause before it. English is tricky that way. Let's break down the sentence another way for you, and add in the supplemental information from the context since.
In June of this year annual inflation reached 9.06% over the year before, and the month to month increase suggested an annualized rate of inflation of 10%. Having accelerated at an increasing rate for the 26 months prior, from an annual rate below 0.2% to over 9%, it would have been reasonable at that time to expect this trend to continue without an upper bound until some change was undertaken, making a hard crash conclusion increasingly likely at that time. Fortunately, belatedly, the Federal Reserve Board had begun hiking interest rates and announcing an end to unlimited mortgage buying a couple of months earlier and so the inflation began to ease. Now with the pressure of inflation easing, the trend reversed and only limited impacts to the jobs economy a hard crash looks unlikely at this time and trending less likely as time goes on.
Is that better?
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