Comment on Income isn't keeping up with inflation, 76% of Americans say in new CBS News poll
Mahonia@lemmy.world 9 months ago
I don’t understand the endgame of price gouging. It eventually will just completely destroy the economy.
I hate consumerism and capitalism, but like in functional capitalism the goal is to get people circulating cash as much as possible. The endgame of a massive pool of money on the part of the ruling class effectively will mean that currency is worthless over time.
Even under a shitty economic system that rewards greed, this doesn’t work for long. Only prioritizing the aims of literal psychopaths is a really fucking bad idea.
They don’t care if the currency is worthless over time because that’s not how they’re storing their wealth. And in the meantime, they enjoy increased inequality due to the Cantillon effect.
Their endgame is surviving in a bunker they build between now and then.
The endgame of a massive pool of money on the part of the ruling class effectively will mean that currency is worthless over time.
How do you figure that? The only thing that would make that currency worthless is the people circulating the currency losing faith in it, i.e. revolution. Is that where your comment is going?
Not specifically. History has repeated a few times here, but “inflation”, either in a normal pace or artificially created, literally means money is worth less over time. 1920s Germany is a specific and extreme example of this that out in a disastrous way, and also coincides with a similar climate of political extremism. An overview of that period of time in Germany
The hyperinflation that occurred during the end of the Weimar Republic was because the government was “printing money” artificially devaluing the currency at extreme rates.
That isn’t even close to whats happening in the United States these days. The USA hasn’t “printed money” like that since the middle of 2020 with the end of QE4 (Quantitative Easing, 4th round). Further, in 2023 the USA is currently doing the opposite of “printing money” to control inflation, which is known as Quantitative Tightening..
I know that interest rates seem high right now, but that is just in comparison to the historically low interest rates of the last 20 years. Back in the mid 70s the prime interest rate was about 21%! Even in for most of the 80s it was above10%. Today its a relatively low 8.5%.
So to recap for the situation in the USA:
We are a long LONG way from the triple digit hyperinflation Weimar Republic or in Zimbabwe that lead to the 1 Trillion dollar bill
All I’m really saying is: “artificially driving inflation is a bad idea and here’s a historical precedent that supports this.” I’m not saying it’s an identical situation. I know that it’s not.
You’re assuming our economy is made of “rational actors” as some Big Brains would tell you our theories are based off of.
The only rationale is “This make me money now. I do this. Company fail later? Me no care me have gold parachute. New company hire me for more and me do money thing again. Me successful important CEO man.”
Viking_Hippie@lemmy.world 9 months ago
That’s kind of the point, though: they literally don’t care about anything except short term profits, be they billionaires or corporations.
Get enough money fast enough and you’re rewarded maximally. Anyone thinking longer than the next quarter, fiscal year at the very most, will be overtaken by those that don’t.
The way the system is set up, once you have more than a set amount of money, you’re rich for the rest of your life. You won’t be allowed to fail even if you’re so bad at business that you lose a billion dollars in a decade where anyone else of your means profited like never before, the government will bail you out in exchange for children going hungry in schools or commuter bridges crumbling.
There’s all incentives in the world to make a shitload of money fast and none to earn in a sustainable way.