Good morning! Today I’m working on the follow-up to yesterday’s post. It went out to paid subscribers last evening, but it is scheduled to go to everyone in the next hour or so. I’m also going to participate in the 4th Annual MMT Conference. The event is entirely virtual this year. It’s also free and open to the public. You can explore the program and view past discussions/presentations
I thought the discussion between Stephanie and Rohan with Jon Stewart was very good and revealing. It is very interesting to hear the different tools that are brought from monetary and fiscal policy and their effects on inflation. Clearly, at this junction, the ensuing impacts produced from the pandemic causing supply chain disruptions, etc. may make the effects on inflation a bit more disturbing from they would be.
What I conclude is that fiscal policy options are rarely used. The realm of monetary policy has become the panacea where everything must be confined to. Yet, with all of the bailouts and exhorbitant money printing, we have seen price inflation gone through the roof but for anything that is captured in the CPI. What is unfortunate is that this price inflation is not captured in the CPI index so nobody cares. Yet, people who want to gain access to buy a home, get good education, access to good health care, etc. have been greatly affected and is part of their basket of products and services which is not captured by inflation, creating rising inequality for people not being able to purchase a home or being exposed to be borrowing to the tilt.
The CPI has turned into an index for bare survival and increasingly irrelevant as it captures less and less the realities of living under dignified and decent conditions. If the pandemic and the Russian/Ukranian conflict had not taken place, there would not be any if this hoopla about inflation that seems to be overtaking the attention of everyone.
I thought the discussion between Stephanie and Rohan with Jon Stewart was very good and revealing. It is very interesting to hear the different tools that are brought from monetary and fiscal policy and their effects on inflation. Clearly, at this junction, the ensuing impacts produced from the pandemic causing supply chain disruptions, etc. may make the effects on inflation a bit more disturbing from they would be.
What I conclude is that fiscal policy options are rarely used. The realm of monetary policy has become the panacea where everything must be confined to. Yet, with all of the bailouts and exhorbitant money printing, we have seen price inflation gone through the roof but for anything that is captured in the CPI. What is unfortunate is that this price inflation is not captured in the CPI index so nobody cares. Yet, people who want to gain access to buy a home, get good education, access to good health care, etc. have been greatly affected and is part of their basket of products and services which is not captured by inflation, creating rising inequality for people not being able to purchase a home or being exposed to be borrowing to the tilt.
The CPI has turned into an index for bare survival and increasingly irrelevant as it captures less and less the realities of living under dignified and decent conditions. If the pandemic and the Russian/Ukranian conflict had not taken place, there would not be any if this hoopla about inflation that seems to be overtaking the attention of everyone.
MMT has been an abject failure. If only Milton Friedman were here….