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Late Great Donald Blake'); 

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Just curious what you guys are making of the current economic dire straits the country finds itself in, and how you relate it to the current administration. Also, what bearing does this have on the country's future?

cheers,
---the late great Donald Blake


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It's a pretty unfortunate situation. Really, what was Biden supposed to do? Not put all those sanctions on Russia? I mean, that needed to be done, I get that, but there were gonna be consequences for that. A lot less oil is being imported now, which means gas is getting more expensive, which affects other things. What can be done about it, really?



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Late Great Donald Blake'); 

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So the way you see it is that (1) inflation was basically unavoidable; (2) there's nothing this or any administration could do about it; and (3) that it's primarily been caused by our response to the war in Ukraine?

I will say, it's worth noting that there were people warning against doing those sanctions and further, the fact they didn't work (and had kind of a reverse effect in many ways) would sort of suggest they didn't need to happen.  In other words, if you knew beforehand they would have hurt us and Western Europe more than Russia, you'd agree we shouldn't do them, right?



cheers,
---the late great Donald Blake



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    Quote:
    Just curious what you guys are making of the current economic dire straits the country finds itself in, and how you relate it to the current administration. Also, what bearing does this have on the country's future?


I have just been busy with real world things more than anything.

I mean it is not good economically, but it is not unique to the US. So it is a difficult thing for any one country to address and impact all of the others.

I think raising rates is the right move to try and curve inflation but given that does not fix supply chain issues, it is probably not going to resolve all of them.

The current Biden administration is going to take the blame, but I honestly think alot of it falls more in the bad luck category of timing than anything else. I am not sure if anyone is prepared for a war that impacts food supplies and energy supplies through the world. And there is only so much you can do about that.

I do think it should be a wake up call to keep pushing alternatives to oil to make the world less reliant on Russia and the Middle East for energy.

Inflation is not going to go down to classic levels, IMO, until international issues are fully resolved. Otherwise demand is going to simply outstrip supply. Not to mention companies making money where they can and making it a bit higher on top of everything else.

I do not think the Biden administration has clean hands with all of this or the government in general, but the options they have are somewhat limited. If the Russia-Ukraine conflict does not happen I doubt the inflation issue is that much of a problem. It is true it was high before the war started, but it was pushed into overdrive by it and it may have even already been on a downward slope.

The bad part, at least politically in the US, is all this sets up for the GOP to do pretty well in the midterms. If they were a normal political party that is fine. The current brand has a strong inclining to never accept non-GOP winning elections again or do anything useful for the country on numerous fronts. That to me is more concerning. And there is nothing they can do about the current issues either that would be more than maginal impacts.





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Late Great Donald Blake'); 

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And there's nothing this administration did that was a major factor in terms of inflation?


I'm writing a piece (starting a substack); just kind of getting a vibe for how liberals are narrativizing under the circumstances.



cheers,
--- the late great Donald Blake


P.S. I do find the idea that because inflation is happening globally it would seem to suggest that we have very little influence on it, as if it's happening irrespective of our economic system and global influence... a bit curious.



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    Quote:
    And there's nothing this administration did that was a major factor in terms of inflation?


Sure, but it depends on what train of thought you are coming from? Government spending for instances has been pointed to as one cause with the COVID relief bill at around $2 trillion.

It probably did factor in somewhere but it depends on what economists you want to go with and their perspectives. As large spending in the past has not always led to a high rate of inflation despite predictions.

And the Federal government has given large amounts of money to corporations and such for ages without having major impacts on inflation but it could be the straw that broke the camels back but at best, IMO, it is a contributing factor but not the primary factor.

The main thing arguing against it to me is that high inflation is not unique to the US.


    Quote:

    I'm writing a piece (starting a substack); just kind of getting a vibe for how liberals are narrativizing under the circumstances.


I am honestly just trying to understand things myself. Not intending there to be a narrative either way.

Everything I am seeing in general has cited supply chain issues where demand is outstriping supply coming out of COVID and things being made worse by Russia's war with Ukraine.

Those seem to be the major causes.

That does not mean that the administration has been perfect on acting. I am just not sure what more they could be doing, but I am not an economist either and the plans for dealing with the problem are often not realistic.

Increasing oil supply for instance is an idea for dealing with high oil prices, but it is not something you can just turn on and off at will in the US and if OPEC is taking little action than choices are limited.

Does not mean there will not be political blow back for it. I just am not of the mind that there is much any president could do in the present circumstances other than around the edges. A drop in demand would be needed to address the problem unless supply ramps up from somewhere.






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No. Do you think we should only do the right thing when it doesn’t harm us? When it gets the results we want? That’s not how it works.

I don’t know what can be done about inflation, there might not be a quick fix solution. But the right thing isn’t always the easy thing.



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Late Great Donald Blake'); 

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I'm curious... who will be most affected by a FED instituted recession made to reduce inflation. From what I understand the economic orthodoxy you're referring to suggests that because demand is outstripping supply, inflation is increasing and so the only way to cool down the economy is to  cause a recession which among other things reduces wages and decreases thereby demand. So to stop working people from paying more for goods, we'll reduce the amount they have to spend. That's the basic idea, right?


cheers,
--- the late great Donald Blake


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Late Great Donald Blake'); 

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No. Do you think we should only do the right thing when it doesn’t harm us? When it gets the results we want? That’s not how it works.


LGDB: I'm not sure what you're referring to here.  Do you mean the Russians or the Saudis?




I don’t know what can be done about inflation, there might not be a quick fix solution. But the right thing isn’t always the easy thing.


LGDB: thing is I'm not sure what you're suggesting the solution is, right, easy, or otherwise. 



cheers,
--- the late great Donald Blake



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    Quote:
    I'm curious... who will be most affected by a FED instituted recession made to reduce inflation. From what I understand the economic orthodoxy you're referring to suggests that because demand is outstripping supply, inflation is increasing and so the only way to cool down the economy is to  cause a recession which among other things reduces wages and decreases thereby demand. So to stop working people from paying more for goods, we'll reduce the amount they have to spend. That's the basic idea, right?


The short answer: The FED's goal is to slow the economy down by gradually increasing interest rates to reduce demand by making it more expensive to borrow money without triggering a recession. Keep in mind, while inflation is a problem, job employment outlook is good around 3.6% which means people are getting back to work which will hopefully ease the pressure on supply chains. 





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So LGDB are you suggesting, we shouldn't have imposed sanctions on Russia to punish them for an unprovoked attack on a sovereign democratic peaceful nation?  

And BTW, you do realize it takes time for sanctions to take effect before declaring they aren't working or won't work at all right?  



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Late Great Donald Blake'); 

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    Quote:
    LGDB: thing is I'm not sure what you're suggesting the solution is, right, easy, or otherwise.


Invest in alternative energy sources. Give everybody electric vehicles. That way, we wouldn't need so much gas, and we'd save money.



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So LGDB are you suggesting, we shouldn't have imposed sanctions on Russia to punish them for an unprovoked attack on a sovereign democratic peaceful nation?  


LGDB:  Yes.  But more importantly, I'm asking why are the illegal wars of the Russians worth disrupting the global supply chains and increasing food insecurity of millions of people around the world, but the illegal wars of the Saudis in Yemen are fine and as a matter of fact we're fine with selling them weapons to prosecute it?



And BTW, you do realize it takes time for sanctions to take effect before declaring they aren't working or won't work at all right?  


LGDB:  Oh fantastic.  It looked in the short term like they were backfiring entirely.  Okay, so what the time frame by which we judge whether or not they've worked?  They don't seem to do much deterring... which by the way is usually how sanctions work.  But one, two years,  or maybe a solid 40 like with Cuba.  Is the idea they sort of automatically work by virtue of having done them?


cheers,
---the late great Donald Blake



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Late Great Donald Blake'); 

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Invest in alternative energy sources. Give everybody electric vehicles. That way, we wouldn't need so much gas, and we'd save money.


LGDB:  We certainly agree here.   I'd go you one further and totally nationalize the fossil fuel industry to facilitate the transfer.  But that's a certainly a long term plan. It probably won't pay the kinds of deflationary dividends for, what, two to four years at the earliest?  And that's of course if Democrats had enough votes (even in their own party) for such a massive infrastructural overhaul... which they don't.  Not to mention they're very like about to lose the House and maybe the Senate, and the heavy voting odds are against Dems in 2024 as well.   If I were Biden I wouldn't be banking on any solutions that take a couple of years to see returns.  


cheers,
---the late great Donald Blake 



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    Quote:
    So LGDB are you suggesting, we shouldn't have imposed sanctions on Russia to punish them for an unprovoked attack on a sovereign democratic peaceful nation?  


    LGDB:  Yes.  But more importantly, I'm asking why are the illegal wars of the Russians worth disrupting the global supply chains and increasing food insecurity of millions of people around the world, but the illegal wars of the Saudis in Yemen are fine and as a matter of fact we're fine with selling them weapons to prosecute it?
It was sanctions, war or doing nothing.

I get your point, but to me it's obvious that doing nothing would have been the worse of the 3 options. 

If there were no consequence to that invasion, then why would Russia stop there? Next Poland and then who knows? With the line of thinking that leads to no consequences, Putin has absolute freedom to do whatever the F**k he wants.

You can't have your cake and eat it. There was going to be consequences regardless of the option chosen. Maybe it could have been better mitigated, but I don't know what Biden himself could have done at this point. I don't like Biden, but previous administrations (Republicans and Democrats) are more responsible for the state of todays world than Biden. He mostly inherited of a mess that was ripe to explode in his face.  

Maybe war would have been a better choice? The only problem is they have a nuclear arsenal and a leader that is likely to use it if he is cornered. So, sanction, as bad as they are, seems like the only reasonable option to me.




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That may be true, unfortunately. But if you want a magical, instant, quick-fix solution then I'm not sure what to tell you.



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Right.  Right.  I'm aware.  Putin bad.  I don't disagree.  I just think it's a bit naive to think that what's motivating this kind of decision on our part-- the sanctions and our stated intention of extending the war--is attributable to a belief in democracy or such unyielding moral scruples.  As I've said, if that were the set of motivating principles then how would you explain our relationship with Saudi Arabia?  With our AT BEST passive acceptance of their humanitarian abuses against the people of Yemen?  Or for the Israeli occupation of Palestine.  It's all principles and pearl clutching with Russia but all cynical realpolitik with out monstrous "allies."


cheers,
--- the late great Donald Blake





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Perhaps one of the various practical stop gap measures that have been proposed.  I mean honestly what Ro Khanna alone has suggested you'd think would rid us of the canard that either Biden can do nothing or do only things that will have an effect in 4 or 5 years.

I swear I do not understand this risk averse attitude of trying things on the eve of such a huge electoral defeat.




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Late Great Donald Blake'); 

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A distilation of the conversation between political reality and the Democratic Party over the next few years if liberals don't reform their party...

https://youtu.be/p93w7MpbZRw


cheers,
--- the late great Donald Blake


P.S. metaphorically lol


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    Quote:
    Right.  Right.  I'm aware.  Putin bad.  I don't disagree.  I just think it's a bit naive to think that what's motivating this kind of decision on our part-- the sanctions and our stated intention of extending the war--is attributable to a belief in democracy or such unyielding moral scruples.  As I've said, if that were the set of motivating principles then how would you explain our relationship with Saudi Arabia?  With our AT BEST passive acceptance of their humanitarian abuses against the people of Yemen?  Or for the Israeli occupation of Palestine.  It's all principles and pearl clutching with Russia but all cynical realpolitik with out monstrous "allies."


    cheers,
    --- the late great Donald Blake



Again, I see what you mean and I even agree with you about Saudi Arabia. The difference I see between Saudi Arabia and Russia is we are apparently much more tolerant toward proxy wars than open ones. Russia was no longer engaging in a proxy war, it crossed a line and violated territorial sovereignty.

Now, should there be consequences to Saudi Arabia's behaviour? I loath several things they do and a lot of the value they seem to have, but as long it it stays within their borders, I'm willing to tolerate them out of respect for the right to be different. The day they aggressively impose this difference outside their borders is the day I want them nuked without a trial.




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Late Great Donald Blake'); 

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Because otherwise I can't make any sense of the following:


 "I loath several things they do and a lot of the value they seem to have, but as long it it stays within their borders, I'm willing to tolerate them out of respect for the right to be different. The day they aggressively impose this difference outside their borders is the day I want them nuked without a trial."



You should maybe check this out:

https://en.wikipedia.org/wiki/Saudi_Arabian%E2%80%93led_intervention_in_Yemen#:~:text=On%2026%20March%202015%2C%20Saudi,ousted%20by%20the%20Houthi%20movement.



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I was not aware. I would have intervene with Saudi Arabia either by imposing sanctions or militarily. 



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I imagine you're like most people here trying to be as morally consistent as you can.  I'd say the question is why does the Washington establishment hold this apparent standard.


cheers,
---the late great Donald Blake



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I guess because if they do something aggressive toward a country with ressources they need, they will only push them toward their ennemy (Russia). Ukraine likely does not hold the same value for Washington.



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Quotes from your own sources:  "While former private equity executive and Federal Reserve Bank Chair Jerome Powell takes aim at workers with a pledge to “get wages down” to combat inflation, he has declined to implement a law to reduce the skyrocketing paychecks of his former colleagues on Wall Street. But as he has sounded the alarm about inflation and wages, Powell has so far has done nothing to help create that rule, even as Wall Street bonuses just hit an all-time record at $45 billion in a single year."



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I'm saying that Biden's apparent sole strategy to deal with inflation is to leave the economy in this guy's hands.  Biden saying earlier that his main method to tackle inflation is to just let Powell and the FED do what they like.


cheers,
---the late great Donald Blake 



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    Quote:
    I'm curious... who will be most affected by a FED instituted recession made to reduce inflation. From what I understand the economic orthodoxy you're referring to suggests that because demand is outstripping supply, inflation is increasing and so the only way to cool down the economy is to  cause a recession which among other things reduces wages and decreases thereby demand. So to stop working people from paying more for goods, we'll reduce the amount they have to spend. That's the basic idea, right?


It does not state that the ONLY way to deal with it is that. It is just a possible solution that the government has some control over.

Hypothetically it is possible to reduce those rates and not have it lead to a recession. One could make the case that the housing market in particular had gotten out of hand anyway and this slows that down and some other markets.  

The best way to deal with inflation is to deal with the root causes, but that is not something that can always be done quickly. And I think the incentive to deal with it giving the market environment is low given companies can make more profit on it. 

The problem is that interest rate alone is often looked at as the fix when in reality it is just buying time to take other actions that impact the middle and long term. 

As it stands, the problems through out the world are not changing because the Fed changes rates. Which one can argue is a reason to let it be and let things play out, but the higher costs are also impacting individuals. So it is either telling folks to suck it up through high inflation and do nothing or do something and cause varying levels of problems on the population and for the individuals. 

I am not sure there is one fix to make this not happen.

If anything, I think this should spur strong investment by the US into renewable and alternative energies to reduce the needs for foreign oil and to push a policy to develop the technology to sell elsewhere to diminish the impact of the some of the oil producers on the world stage and prevent this from happening in the same way again.

As the largest oil producer though the chances of that happening within the US are near zero. But even if they started that tomorrow that does not get around inflation today and that the electorate will 

The other major driving force is the war between Russia and Ukraine. Ending that war should be a primary goal. But that is up to Russia as to when that ends at this point. The world could step back, or just agree to terms that suit Russia better, but that also encourages actions from Russia or others in the future. But economically it would be in the best interest of the world economy to end it, but would it offset future economic problems brought on by repeat behavior? 

Long story short, the fed taking the action that they are is akin to being on a sinking ship and using hammer and tape when a better fix would be to replace the boards, but if the boat is sinking and those in the boat are demanding not to get wet it is at least a way to get to shore. 

In that regard I support it, but I much more strongly support dealing with the causes of the problem outright. 






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bd2999'); 

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Not supportive of that but the Feds job should be to thread a needle and cause minimal damage to individuals jobs while reducing inflation. It rarely works out that way though but that is always the goal. 

I mean the problem is inflation is already hurting people and the near term solutions for dealing with the problem are not numerous. You either let it play out or take some sort of action in an attempt to reduce the problem. 

That solution causes other problems but at the macroeconomic level all actions are going to have some consequences for different parts of the population. 





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The Democratic party is very flawed, but not sure why it is your primary target when the other party that is gaining power is worse in about every respect.

The thought that this is a failure on the Dems seems misguided, as most of the folks that are supportive of this sort of extreme views are not really reachable with any sort of moderate ground let alone a more progressive one.

I would tend to blame the people more who support Republicans as having an active hand.

But to each their own.




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I support this but there are not easy fixes like you indicate below. Even if one was in the drill more crowd you are fooling yourself if you think it makes a difference right now. 

There is little that can be done right now that would fix things. 

The biggest fix would be the war between Russia and Ukraine stopping. That would probably stabilize oil prices but food prices would still be an issue as I doubt they had a regular planting season in Ukraine. 





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