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30 sats \ 6 replies \ @kepford 11h \ on: Economist Reveals: "Inflation is Actually Bad!" (Econ Forces, Josh Hendrickson) econ
I've heard very good arguments that gold bugs and bitcoiners are wrong about inflation. Not that prices aren't going up or that the money supply isn't increasing, but that the products we buy and the quality of life has drastically improved.
It goes like this. Sure a car today is MUCH more expensive than a car in the 50s. But, they aren't the same qualitatively. Cars in the 50s had no air bags. Used more fuel. Were less reliable. Had no AC. I could go on. Its not apples to apples.
I think sometimes we can oversell inflation forgetting this factor. Its a great time to be alive. Not arguing for fiat or money printing but I think we do need to be honest that the free market can be very deflationary in that we get more for our money.
If we want to see inflationary forces in a more clear light it might make more sense to compare goods that haven't really changed as much.
Butter, ammo, milk, meat, eggs, oil, and gold. Even with those there are efficiencies that are deflationary but the quality change is less drastic.
A related issue that's under-discussed is whether regulators are disappearing the bottom of the market with minimum quality standards. Thus, the minimum available product on the market feels more and more expensive.
This is clearly happening with housing, as zoning and building codes are a form of "minimum standard" in terms of floor space, parking, etc, that make it hard for developers to build tiny apartments that serve the lower end of the market.
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disappearing the bottom of the market with minimum quality standards. Thus, the minimum available product on the market feels more and more expensive.
Yes, this is something that is rarely discussed. A while back in came up when people started talking about this truck Toyota makes that they can't sell in the US due to regulations. Is very affordable and MANY in the US would buy it. Its very minimal in features though.
Housing as you point out is another big one. Minimum wage is yet another. Its all price fixing or putting a finger on the scales.
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very good arguments
This is a very weak argument actually. You're effectively saying:
sure, you could have been many multiples richer, but you're a little richer! That's good!
No one sells inflation enough. It frequently leads to cost cutting and lower quality products. It bids up assets. It devalues the working class's wages. It gives employers undue leverage in salary negotiations. It creates an incentive for corporations to put poison in our food to cut cost.
All so that we can checks notes make it easier for banks to make money through loan issuance.
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I think you are missing the point. The point isn't that inflation is good. I agree with you on cost cutting (shrinkflation).
If we want to see inflationary forces in a more clear light it might make more sense to compare goods that haven't really changed as much.
And
Butter, ammo, milk, meat, eggs, oil, and gold. Even with those there are efficiencies that are deflationary but the quality change is less drastic.
I'm not arguing for inflation or fiat here. Just that its complex and over-simplification weakens the argument.
To make your point more strong I would say that in many ways houses built in the 50s used higher quality materials than are used today. Cost cutting due to inflation is a factor. But on the another hand houses built today have features people in the 50s could only dream of.
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