Inflation is Transitory! Inflation is Transitory! Inflation is Transitory!

I get it and made mention of that above but a couple 1/4 pt hikes 6 months earlier may have been a better brake than 500 basis points in the end. Many experts were suggesting it due to the inflation numbers but it was brushed off as “transitory” hence that the new buzz word.

 

3.3% inflation is about the historical average. It's above target, but not worth panicking about. Especially if the needle is pointing downward. Which it is.

It's also crazy and overly simplistic to believe spending was the only reason there was inflation post pandemic. Especially when inflation was a global issue. It's not like the US was the only country suffering from inflation in 2022. Every nation was. That's because of significant supply chain kinks from all over the globe. And comparatively, the US did better than average post pandemic with recovery and inflation.

Trump's policies years ago may not have caused mass inflation. But conditions when he took over were very different. Trump took over after 6 years of a mature economy under Obama. Those same conditions don't exist today. And one issue today we have is labor shortages. We have more open jobs than unemployed.

Trump would only make this problem worse if he gets his way and enacts his policies. Up to 8 million more jobs would be open if all undocumented immigrants were to be deported. And if we added more manufacturing jobs in top of this, we would have even more jobs with nobody to fill them. And shortages in supply do what to the S/D curve? They cause prices to rise.

It's a simple, rational cause and effect from Trump's policies that show they would be inflationary. I've seen zero that would show otherwise. Belief that Trump can do no wrong, or that his policies didn't cause inflation last time, so magically they won't this time despite a completely different world and economic realities isn't solid evidence.

 

I love watching liberals contort themselves in trying to play economists.

 

Please explain to me why deporting millions of people working in our country would not be inflationary. Or how tariffs on all imported goods is not inflationary nor a regressive tax. Or how Trump wanting to devalue the dollar isn't inflationary.

I've asked several times. The best Trump supporters can come up with is Trump didn't cause inflation last time. But again, things are a lot different today than in 2017.

 

He worded that in a very tricky manner. He wanted to give you the impression that there are 10 million illegal immigrants added to what was already here in the last 4 years. But that isn't even close to true. The majority of those who entered the US have been removed already. But yes, all of this is inflationary in a country with a labor shortage. The vast majority of those with work permitted or who have entered without any legal status are working because that is why they are here. We have a labor shortage and they are here to fill those jobs. The more work we do to stop them, the more we cause inflation.

Breaking Down the Immigration Figures - FactCheck.org

 

No he didn’t say that. Pretty poor reading skills.

Most of them have jobs.

So he *only* deports 5 million who are working - Is that not inflationary?

 

Who is saying that?

 

I’ll ask an equally relevant question with the same answer:

Does the pope shit in the woods?

 

instead of this non-substantive and dismissive post, can you actually refute what he is saying? I could argue certain points to a degree but most of what he says is fundamentally true.

 

https://www.theatlantic.com/politics/archive/2024/06/trump-plan-supercharge-inflation/678566/

Among prominent economists, no one was more explicit than former Treasury Secretary Larry Summers in warning that President Joe Biden and the Federal Reserve Board risked igniting inflation by overstimulating the economy in 2021. Soaring prices over the next few years proved Summers correct. Now Summers sees the risk of another price shock in the economic plans of former President Donald Trump. “There has never been a presidential platform so self-evidently inflationary as the one put forward by President Trump,” Summers told me in an interview this week. “I have little doubt that with the Trump program, we will see a substantial acceleration in inflation, unless somehow we get a major recession first.”

Summers is far from alone in raising that alarm. Trump’s greatest asset in the 2024 campaign may be the widespread belief among voters that the cost of living was more affordable when he was president and would be so again if he’s reelected to a second term. But a growing number of economists and policy analysts are warning that Trump’s second-term agenda of sweeping tariffs, mass deportation of undocumented migrants, and enormous tax cuts would accelerate, rather than alleviate, inflation.

In an upcoming analysis shared exclusively with The Atlantic, Mark Zandi, the chief economist for Moody’s Analytics, forecasts that compared with current policies, Trump’s economic plans would increase the inflation rate and force the Federal Reserve Board to raise interest rates higher than they would be otherwise. “If he got what he wanted,” Zandi told me, “you add it all up and it feels highly inflationary to me.”


Summers told me he remains unsure that the policies Biden and the Fed are pursuing will push inflation all the way down to the Fed’s 2 percent target. But he said he is confident that Trump’s blueprint would make inflation worse. Summers identified multiple pillars of Trump’s economic agenda that could accelerate inflation. These included compromising the independence of the Federal Reserve Board, enlarging the federal budget deficit by extending his 2017 tax cuts, raising tariffs, rescinding Biden policies designed to promote competition and reduce “junk fees,” and squeezing the labor supply by restricting new immigration and deporting undocumented migrants already here. Others note that top Trump advisers have also hinted that in a second term, he would seek to devalue the dollar, which would boost exports but further raise the cost of imported goods.

 

Last count by the Pew Center had 7.8 million undocumented immigrants in the work force. That number is likely higher today, but we'll go with 7.8 million. Deporting undocumented immigrants who aren't working would not be inflationary. But 5 million with jobs, which represents about 64% of working undocumented immigrants, and roughly under half of the total population, would be. Or can anyone explain why I'm wrong?

And for future purposes, we have 400k undocumented immigrants in college, and about roughly 3.5 to 4 million undocumented minors. Deporting these kids would put continued downward pressure on our labor force, especially considering the median age of the country has been increasing over time.

 

I generally agree with what she said. Better safe than sorry. It is a little frustrating that they won’t admit or at least openly discuss that almost all of the inflation over 2% is due to housing which is a lagging indicator and has otherwise stabilized.

In terms of the increased immigration remark, that was not inside the quotations of her remarks so I don’t know if she actually said that nor do I know what she means if she did say that.

 

For the most part rates have been too low since the ‘08 financial crises. Getting the 20-year note back to 4-4.25 range is good news. Hopefully, asset prices drop accordingly.

 

the labor force would be decreased, causing inflation.

 

I am too.

Again it isn’t clear she actually said it. But assuming she did, it is true that immigrants increase demand as well as labor supply. Typically we think of increasing demand as good - but that assumes additional labor supply can accommodate it.

if you assumed immigrants came here, and consumed more, and didn’t work, then yes that would be inflationary. But that’s not the case, although one of the issues states and cities had was that these people here waiting for asylum hearings were not allowed to work due to federal law/regs, and in that case that would be inflationary.

Immigrants disproportionately work in areas that have the most immediate impact on supply and inflation - construction, farming, food etc.

If you sucked 10 million out of the workforce it would reduce demand and labor supply. My guess is it would be hugely disruptive. It would cause inflation in the areas I described but would cause demand reduction in certain areas also.