Disclaimer: this is all personal opinion and I have no expertise in this area.
The fed has been pumping cheap money into the system since 2008 to prop up the values of the housing market and the stock market, which is where the majority of Americans have parked their wealth. Now the chickens have come home to roost.
The massive spike in the value of bitcoin should have set off alarm bells as it was a clear sign of excess money sloshing around in the system chasing returns.
The sad part is that while things like stimulus and other programs that pumped money into the system were well intentioned, they mostly ended up exacerbating income and wealth inequality as those closest to the banks - who were able to tell a credible investment thesis - got all the money.
The perverse part is that this (re)capitalization with cheap ended up creating a multiple of bad debt and asset valuations that we are going to have to pay the price for.
I agree with everything you wrote, except I don't think the programs to pump money into the system were well-intentioned. The Fed knew exactly who they were giving money to and actively chose to prop up their friends. IMHO they should have let the biggest banks crash and relied on the FDIC to protect Joe Schmoe's bank accounts. Financial regulations were designed to keep a wall between investment banks and regular banking activities to wall smaller fish from risk. But there is precious little money based on deposits in the system anymore, it's all debt now, and it's all spiraling out of control.
> MHO they should have let the biggest banks crash and relied on the FDIC to protect Joe Schmoe's bank accounts.
The problem have never been bank accounts. The problem have been pension accounts, all the time.
Instead of the old European way of a public, universally funded rolling pension scheme (aka current workers pay for the pensions of the current pensioners in exchange for credits), the US went for almost pure stock and other IOU-based (e.g. bonds) pension funds - a decision that has been biting the US in the butt for the last fifteen years. The FED literally can't do anything that even has the potential of sending the stock market into a major decline because even small corrections wipe out the pension security of the people.
Of course, Big Finance has been exploiting that forced abundance of money ever since. When 35 trillion dollars (!) [1] are available in the market solely due to pension funds, even extremely tiny management fees of a tenth of a percent add to a massive payout for the industry!
The US is in for a really, really wild ride: The pension system obviously needs reform when large amounts of "pensioners" have to work at age 75 and above because their pensions are too low [2], the pension system is unsustainable because it effectively requires endless printing of money and introduces extremely bad side effects (such as enormous amounts of capital being wasted on bullshit in the vain hope it might evolve into a "unicorn"), and at the same time the political deciders can be very well said to be bought off by Big Finance which will do everything it can to avoid being cut off of the money heroin spigot that is pension funds. Not to mention that voters are not going to vote for any politician that the opposition (aka either primary competitors or the actual opposition) can smear as "it will endanger pensions".
The effective way out would be a nationalization of all pension fund assets and a complete turnover of the entire system, but we all know that that is not going to happen.
I agree with this too. Savings accounts became a thing of the past 20 years ago or more; the Fed wiped out returns on them with permanently low interest rates. It was deliberate to get that cash into the stock market.
The whole shebang was absolutely engineered to make the stock market the center of all fiscal policy, centralizing all risk and driving all decision-making towards keeping that Jenga tower piling up.
The idea of investing into an index fund is pretty solid in any case. The money from savings accounts ends up on the stock market just the same, only with the bank pocketing the profits between the savings account interest and the rise of the usual indices.
Don't US banks have financial regulations that they can't just take savings deposits and buy stocks? I thought they have narrow leeway with risk and deposits are mostly used for loans.
> Instead of the old European way of a public, universally funded rolling pension scheme (aka current workers pay for the pensions of the current pensioners in exchange for credits), the US went for almost pure stock and other IOU-based (e.g. bonds) pension funds
What? The US absolutely has a public, universally funded pension plan: Social Security. Its the one of the largest government expenses.
But Europeans park their pensions to markets now as well, the times when new workers paid for old ones are long gone. People don't reproduce enough to keep the system stable.
TBH I don't know if any economic system is stable in the long term. It's something that neither pops out of the mathematics of the universe nor has been selected for and tuned by evolution. We're far, far out on a branch that this planet has likely never seen before.
With long life spans and high standard of living, caring for the elderly in societies is a really tough problem. Throughout most of human history, people haven't lived this long, and if they did, they were either of the few tribal elders or taken care of in multi-generation households. The modern individualism and independence assumed today doesn't have a lot of good solutions.
It's not only that life spans are longer with higher care, it's that society has also hamstrung fertility rates and removed the pyramid-shaped scheme that population levels and society have grown accustomed to supporting for centuries. We're in uncharted territory with an upside-down pyramid. Without immense automation, young labor will be priced very high and deflation will naturally occur without constant inflationary monetary intervention which has other nasty side effects. Imagine society always had 2 young people helping out 1 elderly and just within the last two generations we've flipped to needing 1 young person to help out 2 elderly. That's 4 times the burden.
We could, as a society, also get rid of bullshit jobs and provide better, meaningful education. Not to mention we could also cut down on waste (fast fashion and similar trends).
Both of that will be inevitable (either due to capitalist forces aka costs or because of actual natural disasters), the key question is if politicians will act early enough to be able to influence and guide society through the transformation or if it will be a chaotic, the-strongest-survive transformation.
There have multiple structural changes in the fundamentals of the economy over the last seventy years.
The problems the Fed faced from 1945-1975 - with explosive growth, the services share of employment relatively low, wages following productivity - were entirely different from those faced subsequently.
1948 and 1956 is when the 30 year fixed mortgage came into existence in the USA, and arguably the point at which the purpose of the Fed became propping up house prices.
For the last 30 years people have been predicting that government spending and quantitative easing were going to cause massive inflation. And for 29 of those years they've been wrong.
If they were right, then Japan would have had massive inflation over the last 30 years. Instead, they've had deflation.
So when looking for the source of inflation, one should look at what's different about 2021/22 rather than what's the same about 2021/22.
AKA, the massive supply shock caused by Chinese shutdowns and the war in Ukraine.
This is definitely worth looking at deeper. I don't have the answers just questions about what made Japan different. Did they keep printing money/borrowing when they entered the death spiral (debt/GDP ratio >120%)? Did they have massive welfare programs? Did they have other massive spending by the government (military or number of government employees for example)? Did they have really high taxes? What makes Japan's circumstances different than our own, or in the past Argentina, or Greece, or <insert any nation that has had over 120% debt/GDP ratio in recent times here>.
I also think saying 29 of those years they were wrong is not accurate. The inflation hasn't been there BECAUSE the Fed kept it from happening. They've simply been letting the water build up behind the damn (while all tat printed money went to major companies and industries as the IOU was written in the taxpayer's name), and we're now at a point where there's no more road to kick the can down. We're at the end of the road. The debt/GDP ratio has been over 130% since 2020. That by definition means we're in an economic death spiral. That doesn't mean it's not reversible as other nations have demonstrated. Our death spiral becomes irreversible by 2028 and the nation insolvent by 2040 unless something out of the norm happens, like a balanced budget amendment, austerity, reduced spending, an increase in the GDP, the forgiving of our debt by China, all of the above. I'm pretty sure that's where The Great Reset was supposed to come in. I'm also pretty sure the banks aka the Market Makers were well aware of this timeline as stocks started ramping up for the biggest bubble ever a year before the debt was scheduled to breach 120% (the timeline has been public record since at least 2014 which is when I first saw it on CSPAN during the 2015 budget review meeting).
> The fed has been pumping cheap money into the system since 2008 to prop up the values of the housing market and the stock market, which is where the majority of Americans have parked their wealth. Now the chickens have come home to roost
I doubt the Fed can follow through here to their mandate of keeping inflation under check. In response to a 8.5% inflation, they are raising rates by how much? 2%? Based on 10Y/2Y yields, the market seems to have priced in rates rise to 2-3% and then come back down either because of Fed starting back again QE or recession and subsequent QE. Either way a recession is impending and this time with Fed actively seeking the landing (soft or hard doesn’t matter, the economy is too much into debt to handle the shock) and with that goes their maximum unemployment mandate.
My thesis is after this episode of Fed Won’t have any validity to their existence. Inflation keeps chugging along, and with the rate raises they actively cause a recession. And those are the two mandates they have - price stability and unemployment.
> The massive spike in the value of bitcoin should have set off alarm bells as it was a clear sign of excess money sloshing around in the system chasing returns.
Alternative view as someone who's been following crypto forums over the past few years (and have a _small_ amount of money in various crypto-currencies): The crypto craze during the COVID era has a major undercurrent of pure pessimism / cynicism about the financial prospects for the Millennial+ generations. A very common theme of the interest can be described as effectively a financial YOLO. Many of the posters pretty clearly do not believe that they can prosper in the modern economy if they follow the standard rules. Wages aren't keeping up with inflation of the major assets people require (especially housing, childcare, etc). They see the economy as rigged by the financial elites and crypto as a untapped reserve of economic growth which they can leverage to allow them to have a middle to upper middle class lifestyle they believe that they should have.
For these people, the money they invest in crypto isn't extra money. It's money they _aren't_ investing in savings, in the stock market, etc.
So, this is a relative comparison between Q1 2020 and Q1 2022. Remind me, did anything important unfold in Q1 2020?
Edit: I don't understand. Parts of it are referencing 2019 vs 2021, other are talking about 2020 vs 2022. Why? And they claim 111400% quarterly profit growth for Mattel. How much did they jack up the price of Barbies to increase profit more than a thousand fold? None of this makes sense.
I wonder if they’re not correctly accounting for warehoused stock - or if they’re doing something silly like comparing a very small profit (or even a loss) during Covid to being back to making a profit now.
Okay, but it turns out that people will pay whatever it takes to keep food, water, and shelter. So if price analysis were as simple as you seem to think, everyone will eventually be completely emiserated by spending the entirety of their income on simply staying alive.
Which is why we have laws to keep prices close to "what a thing costs to produce", and companies can't just take advantage of inflation to raise their profit margins; since, when they've historically done this, it kills a ton of people.
> whatever it takes to keep food, water, and shelter.
There are still economizing responses. When certain foods are expensive, people search for alternatives. When housing is expensive people move in with family or get roomates. With gas people carpool and drive less.
I don't want to suggest those are good outcomes, just that there is a response function.
This is the problem with inflation. As high inflation numbers get broadcast to the people, people become more willing to spend money now on commodities that may not be available / affordable in the future. That causes profit margins to increase as people take into account future inflation, and thus eventually cause a self-fulfilling prophecy.
I think everything you typed appears to be wrong? For instance there are no laws keeping prices close to producer price. That task is done by the competitive marketplace in capitalism. In socialism/communism the price is controlled by authoritarianism, which is why those regimes are marked by mass shortages and starvation.
If that were true Pepsi and Coke would compete their profit margins to 0 for almost identical products. However they both make tens of billions of profit a year.
Pepsi and coke have differentiated their products. The generic brand cola does have next to 0 profit margins, big soda can charge more because they have a monopoly on their brand.
"What determines the price a company sets for its product?"
My intuition about this is that a consumer will only buy a product if they value it more than its price, and a company will only sell it if it cost less than its price. So the price is inherently some point in between the buyer and seller's value of each item. If the price equals the buyer's value, then the seller gets all the profits, and the buyer benefits zero. If the price equals the seller's value, then the seller gets zero profits, and the buyer gets all the benefits. What determines this tradeoff?
The long answer involves me learning some basic microeconomics with the help of https://courses.lumenlearning.com/suny-microeconomics/. Maybe one day I will write a longer blog post about it, but I'm still not sure I fully understand the answer.
I am still not an economic expert, but here is my attempted answer to practice my micro thinking: the goal of companies is to maximize profits. If they can raise prices while increasing profits, they will do so! The only thing stopping them from doing so is competition from other companies. Depending on whether you have "perfect competition", "monopolistic competition", or flat-out monopoly, their ability to do so will differ.
For the companies examined in the article, most of the companies experience monopolistic or imperfect competition. The fact that they can increase profits by increasing prices shows that people have more money to spend than they used to (makes sense, due to pandemic saving, stimulus, and a tight labor market and inflation leading to wage growth). Prices will
increase until consumers feel enough pain that they transition back to whatever previous mix of thrifty and luxury goods they were using before the pandemic. Is that right?
But then this analysis leads to even more questions...
I'm not an expert at all, but my understanding of inflation is that it's due largely to a handful of things:
- Housing prices are bonkers due to chickens coming home to roost on lots of policies (lack of tradespeople due to cultural stigma and wage inequality/social welfare state for contractors, bad zoning and NIMBY-ism, non-existent public transit, education policy creating 30% very bad schools, 65% mediocre schools, 5% good schools, and very expensive private schools).
- Supply chain shocks due to COVID.
- Oil went bananas.
A couple of things that might be undersold:
- A lot of people left major cities and have lower/zero housing costs.
- A lot of people aren't paying their student loans (heard this costs the US $4-5 billion/mo, which is quite a stimulus package).
A couple of things I think it probably isn't:
Stimulus/Rescue: I heard a stat on a podcast that said the vast majority (maybe 2/3?) was unspent, so it seems unlikely this is a major driver.
Wage growth is pretty interesting. Reading about it, it seems like a lot of people left the labor market or switched to lower-demand roles/careers. People take this fact and say "see, labor supply went down relative to demand and the price went up". But if you've got 10 employees costing you $1m/yr and three quit, leaving you with 7 employees costing you $1m/yr, sure wages went up, but not overall? I haven't seen this kind of analysis out there, so I wonder if there's some politicizing by the "we need low inflation at the cost of unemployment" people towards the "we need full employment at the cost of inflation" people.
I think that's mostly true, but there's some other factors that are pretty significant:
- Down payments are pretty hard to come up with on a $1m property
- A lot of the time you're competing with developers willing to pay cash
Both of these things are very true here in DC's housing market, and I've heard similar things from friends in other more-or-less-urban/near-suburban places.
> Down payments are pretty hard to come up with on a $1m property
I agree, it does create some kind of ceiling.
> A lot of the time you're competing with developers willing to pay cash
I think that's a secondary effect. Low interest rates create a market of people willing to buy at high prices that the developer is hoping to resell to. A lot of their working capital is also borrowed.
> I think that's a secondary effect. Low interest rates create a market of people willing to buy at high prices that the developer is hoping to resell to. A lot of their working capital is also borrowed.
> Purchasing decisions are made based on the monthly payment.
Yep, this made the decision for me. Do I pay 30% more rent to move into a basement? Or 50% more mortgage for a full, freehold house outside of the city?
I like living in this urban area, but a hybrid commute from a small town with the bare amenities is not bad either if it gets me a house.
Trying to get a house built is brutal right now. That surely is high paying remodel jobs driven by interest rates, but many many tradesmen have told me they have no one to work with and no one to hire. A lot of these guys are aging out.
The interest rates certainly factor into high home prices, but really it just comes down to supply and demand. We haven't been building enough houses, especially where people want to live.
Definitely, but I think that's because of the lack of tradespeople and the barriers involved in building new houses. It's hard to build multi-unit-dwellings in cities now, so if you ever get an opportunity you're building a luxury megaplex to squeeze the max profit out of it. And sure you can look further out, but then you're looking at school district problems, lack of public transit, lack of amenities like grocery stores, restaurants, theaters, shops, culture centers.
I think a lot of this probably boils down to our insistence that cars be huge parts of our lives? It's really incompatible with the 15-minute city just because of the space requirements (parking at destinations, parking at homes, street width), and let's not forget maintenance costs and noise/pollution externalities. But I guess in the face of no public transit, what are we supposed to do?
Definitely, why bust your ass to drive far out of town or build an irritating thing when you don't have to?
I... maybe think the same thing about the tradespeople shortage as I do about the nursing/teaching shortage? We super need them, wages are going up, but supply isn't, which breaks the law of supply and demand (more or less). I think the cause here is a culture one, like there's not a lot of prestige or money in this blue/pink collar kind of work (generally, not always), so people (millennials) went into white collar professions instead, so we have a glut of people with bachelor's degrees and college debt, and a shortage of people with trades credentials. I'm handwaving a lot, but it seems intuitively true to me.
At least where I live, there's no stigma to being a contractor or builder. Most of them make very good money, and while they might not know the difference between Gouda and Gruyere, they're not dumb hicks.
I do think that it's a tough field to keep "staffed up" since it can wear people out pretty quickly, so it needs a constant influx of newcomers.
Oh yeah actually I remember when I was in high school one of my friends' parents were contractors and they'd build their own beautiful house and landscaped it amazingly. Turns out they were also pretty well off. Definitely popped my bubble about construction.
I think you're probably right about attrition, also the work can be hard on people. But also I think I read somewhere there just aren't a lot of people going into the field. Something about parents encouraging their kids to go to college and become white collar professionals instead of blue collar laborers. That rang true to me too.
> Stimulus/Rescue: I heard a stat on a podcast that said the vast majority (maybe 2/3?) was unspent, so it seems unlikely this is a major driver.
What does it mean to be 'unspent'? If it's put into bank accounts and banks risk the money on mortgages or something, then it gets spent by proxy, and drives up housing costs as banks seek to create new loans
That's an interesting point: stimulus as bank subsidy. Maybe in that sense it is a major driver, not because like "this is what happens when you just give people money" but because there's basically no way to give people money without giving banks money, so it's more like "this is what happens when you give banks money". Very interesting!
> I heard a stat on a podcast that said the vast majority (maybe 2/3?) was unspent, so it seems unlikely this is a major driver.
Having unspent money ripe to be spent seems like it should be considered a significant driver. Spending a little bit more here and a little bit more there is seen as no big deal when your bank account is flush.
> Spending a little bit more here and a little bit more there is seen as no big deal when your bank account is flush.
Wouldn't this just be spending the stimulus money? What I'm saying is that most of it hasn't been spent, so it can't count as that much "extra money in the mix" as most people think.
> Wouldn't this just be spending the stimulus money?
Most likely it is being spent. Slowly. Like you said, some of it has been spent already. It is unlikely that stopped. It just hasn't been blown all at once.
> What I'm saying is that most of it hasn't been spent
Me too, more or less. If it were already spent then bank accounts would be tight and people wouldn't be able to spend more. However, if they're only dipping in a dollar or two at a time, they can both spend more and leave their bank accounts almost untouched. At least for a while. Give it enough years and it may eventually erode to nothing, but in the short term you don't have to spend much of it to pay more at the store. Inflation is a little higher than usual, but not that high in the grand scheme of things.
Oh yeah definitely. I think the thing I heard was that rather than like, functioning like a tent pole on inflation it was more like just a small contributing factor, but will be for years to come. I kind of stuck on it here because I think the politics have been "this is what happens when you give people hundreds of billions of dollars", but I don't really think the evidence supports that argument.
> "this is what happens when you give people hundreds of billions of dollars"
Well, in fairness, at the onset of the pandemic there was a looming fear of deflation and we weren't very far from that actually happening. All that stimulus money was poured into the economy by the central bank specifically to create inflation, per inflation target mandates. The idea is not unwarranted.
But also not that simple. Where the money ends up is equally important. You could 'print' trillions of dollars, but if you gave it all to Bezos, not much would change. He'd just sit on. Maybe inflate some assets like real estate, but he's not going to drive up the price of bread. Bread relies on purchases from the masses who don't have more money to spend in that scenario.
If you distributed that money out to everyone, however, then they each do have more money for bread. Then you can start to see inflation come of it as people start to compete with their extra cash in hand.
The stock market has been doing terribly lately, so I wonder what dynamic is going on right now- even with higher profits something is fishy (high interest rates mean a higher yield on bond investments as an alternative, so lower valuations?)
Yes, the last part. Stock market profits are still growing, it's that P/E multiples are being reset due to the alternative of safer higher interest rates on bonds and cash. Plus there's recessionary fears from global issues like the ongoing invasion of Ukraine and China's lockdowns potentially major shuttering of global supply.
"Guardian analysis of 100 top US companies percent change from the most recent reported quarterly profits to two years prior."
Wow. Incredibly misleading journalism. This is terrible. They are comparing today with April 2020. Seemingly arbitrarily. I wonder if anything was going on in April 2020 that may have depressed the net profits of companies like Chevron (on their list). Wasn't oil at -39 dollars per barrel in April 2020? Chevron doesn't even set or raise prices on the cost of a barrel of crude oil which contradicts their entire point anyway.
I know the Guardian has a certain bias but this is basically misinformation with data.
“We should just get rid or corporations. And we should get rid of prices too. And profit of any sort should not be tolerated by the Government. We should all have exactly the same possessions and live in identical houses that the Government provides. And these shouldn’t be better for people in the west. We should all have free healthcare too, and unlimited credit that can be used for loans that never have to be repaid.”
—The Guardian
They're not raising prices to make more profit. It's just to try to tame inflation. They're intentionally trying to cause hardship to make people more desperate for fiat so that they work harder for less money.
But IMO it's not going to work because it's well-off corporate employees who are causing most of the inflation. Those corporate employees won't be feeling the squeeze so it's misdirected. I predict that inflation will keep increasing and big corporations are going to squeeze the productive working class harder and harder... A recipe for a revolution.
This analysis glances over the simple reality that corporations not only need to make a profit, but need to make the highest profit possible relative to their peers. Stocks have reached such insane valuations that companies need double-digit growth just to maintain their existing prices
Many Americans are still flush with cash from loose monetary policy, pay raises, and COVID savings. So long as they have this cash, companies will keep increasing prices. Companies are also understandably trying to get in as many price increases as they can now because this may not be possible later.
And what about when these companies lose money? Should I have paid more for my flight tickets during the pandemic just because I had a higher net worth than United?
No they fundamentally don't. We have chosen to organize society in this particular way, and we could choose differently.
Stock ownership is highly concentrated among the rich. When we prioritize the interests of those owners over the customers, the majority lose. Maybe those stocks should crash. Growth by just raising prices isn't really substantive growth for society anyways, it's just moving money from consumers to investors.
56% of Americans own stock and if you roll in pension plans (heavily invested in stocks), your claim that "ownership is highly concentrated among the rich" and "maybe those stocks should collapse" is clearly not based on facts or taking into account the impact.
I'll note that both statements can be true: While 53-56% of folks own some sort of stock, most folks own very little stock and thus, don't really have much say. IIRC, something like 70% of the value of stocks are held by the top 10% earners. I mean, owning a lot of stock generally requires buying a lot of stock so this does make sense.
I'll also point out that it isn't like the 56% is evenly distributed. When you are more wealthy, you are vastly more likely to own stock. The poorest among us generally would have to sell any reasonable amount of stock amount in order to qualify for benefits so that you are destitute enough to get help with shelter.
Few people say they have stocks if they have a pension and nothing else mostly because isn't actually owning the stocks.
I'm not sure that matters. If I make $60,000 per year and have $5,000 in equity (after saving for 5 years), whether it goes up or down matters a lot to me. That fact that some rich person owns 100x that amount is irrelevant to my well being.
Then add on top those with pension plans, 401ks, etc. And the older you get the more equity you hold. Again, holding $100,000 in equity at 60 isn't much in the grand scheme, but that's the person's retirement fund. It matters a lot to them.
Thank you. I'm broadly left-wing but I'm tired of how much economic illiteracy is common coin nowadays among the left. That argument reminds me of the exasperating "climate change is caused by the rich because most carbon emissions come from big companies" argument.
The solution to high prices is simply increasing competition. Eliminate the patent system, remove government regulations and licensing (usually set up by entrenched businesses with regulatory capture), eliminate tariffs.
Overly naive. Without some form of hardware/drug matter patent a whole lot of things aren't going to get made without direct government funding. Why, for example, should a drug company try to be the first manufacturer of a new drug class given the risk of failure? Why try to invent a new product class - better to clone.
Without regulations, there's no consumer protection or guarantee that what's purchased was what was described. Very bad when it comes to biologically active materials and "well, it worked for me" isn't the kind of defence I want to hear in the marketplace.
And I'm not sure how that would eliminate costs due to transport or raw materials unless you allow stealing them.
Regulations provide increased safety but at an extremely high cost. In the absence of regulation companies need to build trust with consumers through their reputation and third party auditing.
Consumer protection is vastly overrated IMHO. Better to have more affordable healthcare for all than high liability healthcare that only the rich can afford.
Better to have more affordable healthcare for all than high liability healthcare that only the rich can afford.
Oh, see, I moved out of the US to a place with socialized health care, so I don't have to worry about that. Turns out that you can do a lot of cost saving measures when you pool money together. In other words, it isn't consumer protection making the prices high, but rather it is being sold like a good. Consumer protection, if it were really strong in the US would protect you by making sure that you get what the label says is inside. In other words, keeps you from eating a product with eggs when you have an egg allergy.
That cost isn't so high, either. None of us are ever going to be knowledgeable enough to check everything and we know that things like "third party auditing" and "reputation" can really be gamed. And we know that it doesn't matter if your local hospital is bad if it is the only one in the area - and that sort of thing happens all the time. Regulation isn't perfect, but I would rather not live in an era without it.
I don't understand how people can say this when the pre-existing condition insurance nightmares occurred before regulation stepped in to stop it.
For reference: My parents went bankrupt back in 2003 because my mother had a stroke and insurance denied her claims because they called it a pre-existing condition. I think people that claim consumer protection is vastly overrated have never found themselves in a situation where they get fucked over by under-regulated corporations.
Being pregnant was a pre-existing condition before ACA, forcing people to carry COBRA for the length of the pregnancy and some more time to allow for complications. Or, you could not switch work until the child was 3-6months old.
Maintaining health insurance is fine. Maintaining the original one from the former employer is expensive. The ACA requires the new work-provided insurance to accept the pregnancy. Avoids carrying two insurances.
Without rather strict drug regulation, healthcare of any kind will waste a lot of time dealing with drug overdoses and side-effects-gone-wild. How many unregulated business "build trust" with customers. Walmart sells on cost not trust.
And there's simple solutions to healthcare that all nations except the US have found.
Remove regulations and we all suffer. EPA is just one example; regulations stop companies from dumping toxic waste in the ground and sewers where it leads to streams and rivers and ground water, and goes back into our food and water (to say nothing of killing animals and insects which further impacts ecology).
I agree that this is a basket of things we could do to increase competition which may reduce prices, but it may also create a whole entirely new host of problems depending on what we change. Eliminating tariffs for example will almost certainly put a lot of Americans out of work who, can't really do much about it. When they don't have jobs and don't have money to pay bills or eat, they'll re enact tariffs, or... start a revolution. The main issue is that all countries in the world don't live on the same playing field. If we got rid of nation states altogether then we wouldn't need a lot of these things.
The solution to high prices is stop using monopolized nation state currency being “loaned out” to us by banks.
Remove useless middle men whose role is to “generate value” by charging fees to move money.
Money is moved via electrons in machines now. Moving real money is environmentally expensive and let’s grifters nickel and dime for merely acting as custodian for a moment.
There are a lot of options and we didn’t save horse and buggy when cars came along; screw the bankers.
Remember when there was debate over $15 dollar minimum wage and people arguing against it said that would just increase inflation? Well entry level low skill jobs pay over $15 dollars an hour and now we have inflation.
Yeah, because the US raising their minimum wage was the only significant thing to affect the World economy the last three years. /s
I'd say post-pandeming fumbling, pumping billions into the (global) economy combined with an energy crisis and a food shortage looming over some parts of the world, supply chain issues leading to scarcity for some things previously considered readily available commodities, not to mention a certain special military operation in Europe have also contributed.
It's a perfect storm consisting of things that many considered unthinkable five years ago.
You're using it as a generalized argument that could be used to cast doubt on anything that is true. If someone makes a prediction if A then B, then we decide to do A and B happens, the duty of people who still believe that A doesn't imply B is to at least speculate about alternate causes of B, not to argue against the concept of cause and effect.
Only one problem, mapping my statement to your example, Brian was thrown off the Eiffel Tower and Brian is dead. Now did Brian land in a net and die of other causes? I guess you have to argue without using random fallacies that don't apply.
> increasing wages does not increase quality of life
That's a whopper of a statement. What are you basing that on? As someone whose increased wages allowed for home ownership and breathing room for emergencies, this seems intuitively incorrect, but we don't have to rely on intuition: there are solid studies that found the same, as well as pointing out the broader societal impacts of wealth inequality related to low wages, e.g. https://healtheconomicsreview.biomedcentral.com/articles/10....
Thats not what I mean... I mean from a macro level increasing wages through something like a minimum wage. When you increase minimum wage, the new minimum wage becomes the new low wage and the quality of life goes back to where it was before through inflation.
edit: should be standard of living instead of quality of life.
I completely disagree that higher wages does not increase quality of life. Especially when we are discussing minimum wage workers. Certainly there is a threshold at which the increments have a diminishing effect. But minimum wage workers are still roughly around 50 thousand dollars a year away from that point.
When you are making minimum wage, every dollar counts in relieving the stress of simply trying to exist.
The fed has been pumping cheap money into the system since 2008 to prop up the values of the housing market and the stock market, which is where the majority of Americans have parked their wealth. Now the chickens have come home to roost.
The massive spike in the value of bitcoin should have set off alarm bells as it was a clear sign of excess money sloshing around in the system chasing returns.
The sad part is that while things like stimulus and other programs that pumped money into the system were well intentioned, they mostly ended up exacerbating income and wealth inequality as those closest to the banks - who were able to tell a credible investment thesis - got all the money.
The perverse part is that this (re)capitalization with cheap ended up creating a multiple of bad debt and asset valuations that we are going to have to pay the price for.