{"id":186740,"date":"2013-10-28T20:02:00","date_gmt":"2013-10-29T01:02:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2013\/10\/28\/economists-finally-get-a-clue\/"},"modified":"2013-10-28T20:02:00","modified_gmt":"2013-10-29T01:02:00","slug":"economists-finally-get-a-clue","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2013\/10\/28\/economists-finally-get-a-clue\/","title":{"rendered":"Economists Finally Get a Clue"},"content":{"rendered":"<p>I called for this at the start of the financial crisis, and finally <a href=\"http:\/\/www.nytimes.com\/2013\/10\/27\/business\/economy\/in-fed-and-out-many-now-think-inflation-helps.html?src=rechp&amp;_r=1&amp;\">many economists have begun to realize that there is such a thing as inflation is too low<\/a>:<\/p>\n<blockquote><p><span style=\"color: blue;\">Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama\u2019s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">The school board in Anchorage, Alaska, for example, is counting on inflation to keep a lid on teachers\u2019 wages. Retailers including Costco and Walmart are hoping for higher inflation to increase profits. The federal government expects inflation to ease the burden of its debts. Yet by one measure, inflation rose at an annual pace of 1.2 percent in August, just above the lowest pace on record.<\/span><br \/><span style=\"color: blue;\"><br \/><\/span> <span style=\"color: blue;\">\u201cWeighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about,\u201d Kenneth S. Rogoff, a Harvard economist, wrote recently. \u201cIt should be embraced.\u201d<\/span><\/p><\/blockquote>\n<p>Low inflation favors the rentiers over the producers.<\/p>\n<p>Of course, the economists, are talking about maybe moving the targeting from 2% to 3%, and I think that we should target 6%, but I&#8217;m an engineer, not an economist, dammit!<sup>*<\/sup><\/p>\n<p><sup>*<\/sup><span style=\"font-size: xx-small;\">I <span style=\"font-weight: bold;\">LOVE IT<\/span> when I get to go all Doctor McCoy!!!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I called for this at the start of the financial crisis, and finally many economists have begun to realize that there is such a thing as inflation is too low: Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[991,973,1200,985],"tags":[],"class_list":["post-186740","post","type-post","status-publish","format-standard","hentry","category-academe","category-economy","category-inflation","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/186740"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=186740"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/186740\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=186740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=186740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=186740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}