If, for the sake of argument, the government printed 100x the currency that currently existed, in short order, corporate profits would skyrocket as that money was deployed and the market as a whole into which that currency was being deployed realized what the situation was.
Those corporate profits wouldn't be causing the inflation.
They would potentially be the place where they are first noticeable and measurable according to certain measurements, but in a complex system that you do not have instrumented up completely, the first place you see a particular thing appear is not necessarily its origin point. Anyone debugging distributed systems should have direct experience with that.
This is not what is happening, but I kind of this kind of boundary analysis where you stick large numbers in to a system like a helpful way to feel out the landscape of a problem like this.
I'm open to the idea that this or that corporate action is making things better or worse. But "inflation is bad because corporations discovered greed in 2020" is such an obvious falsehood that it calls into question why anyone is even pushing it as a reason. Greed was invented somewhere around the time the first cell divided into a second cell, not several years ago.
Yes. But importantly its not the printing of money that was the problem either.
If you think about the path money takes especially the furlough:
government -> consumer -> big capital (Petro/chemicals, Pharmaceuticals, Food Conglomerates, Landlords, Tech...). And that's where it stays. How do you get it back? Well aimed taxes. Otherwise big capital buys all the assets as in investment with their new found pile.
What in the world? I get that “Big Capital” is an easy boogeyman but how do you think this works? If you print money, so you can exchange that for someone else’s goods, what entitles you to “get it back”??
It's not really ideological but practical. If you don't want accrual of resources into small pockets of people, it needs to be mixed around.
The "entitlement" the government has is their transitory monopoly on violence. And in a functioning democracy that monopoly is exercised according to how society at large believes it will benefit them.
It's important to remember money arises naturally but the dynamics of how its used and its value is partly a top-down decision. It's really a tool of persuasion not some universal marker of value. The stock market wouldn't fluctuate wildly around meme stocks etc if that were true. Argentinians can tell you that the underlying economy might not always reflect the market value of money itself.
I'm not villifying big capital , it's just prudent to be wary of it as a phenomenon. Big capital allowed for huge distributed tech/infrastructure creation like computers (with a nudge from the gov). All the actors within those organisations are just acting 'rationally' within the contraints that have been set for them. But these current constraints might not be what's best for society in the long term.
The reason you would need it back is to preserve the system (for those who are being taxed also)- as money accrues, the ability to rent-seek rises which raises costs for all of society and reduces productivity and more importantly the well-being of the population. Past a point workers won't feel invested in working, elites will start infighting to get a foot in the shrinking doorway.
And the tax -> government spend. Which again stokes inflation so not sure thats a good argument. The government has to cut spending and build a surplus for taxes to be disinflatory
I think it probably depends on how they spend it. Investments that increase efficiency would be long-term deflationary. Infrastructure, education, research etc. All the obvious stuff we all know we need more of.
It's impossible for the IMF to admit that, or the World Bank. I think most people in the Western world confuse their freedom of speech to mean that there is enough coverage of what's happening inside their institutions.
Yes. This is a gaslighting piece from gvmnt (as always). Here in south america they blame inflation on natural causes (ie. "rice and beans are 60% more expensive this year because of the dry winter").
Nothing but disinformation.
Did profits increase? Potentially, yes. But they couldn't have increased without the enabling condition of massive money printing.
Companies were trying to maximize profits before 2020. That hasn't changed. What changed was the monetary policy.