Rapid Inflation Fuels Debate Over What's to Blame: Pandemic or Policy

[brooklynite]

New York Times

The price increases bedeviling consumers, businesses and policymakers worldwide have prompted a heated debate in Washington about how much of today’s rapid inflation is a result of policy choices in the United States and how much stems from global factors tied to the pandemic, like snarled supply chains.

At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation, including factory shutdowns in Asia and overtaxed shipping routes that are causing shortages and pushing up prices everywhere. The officials increasingly cite high inflation in places including the euro area, where prices are climbing at the fastest pace on record, as a sign that the world is experiencing a shared moment of price pain, deflecting the blame away from U.S. policy.

But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.

The world’s trade machine is producing, shipping and delivering more goods to American consumers than it ever has, as people flush with cash buy couches, cars and home office equipment, but supply chains just haven’t been able to keep up with that supercharged demand.

[bhikkhu]

1. Two things from my own experience, in the car business

Car prices have gone up simply because of supply and demand. It's hard getting new vehicles so we sell more used vehicles. Which were already a bit hard to get, so the lack of supply has allowed all the prices to go up. Pretty inevitable.

On the service side the shop I'm at has been stretched pretty thin, running on about 60% of the people we'd usually have. This has allowed my employer to post record profits. They also increased the shop labor rate about 20% in the last year, for which there was no reason other than inflation is in the news and they can get away with it. Usually a shop rate increase would be required by an increase in expenses, such as payroll or property costs. Neither of those have gone up at all; pretty much the opposite. The shop rate increase is just opportunism, grabbing the cash while it's available.

[W_HAMILTON]

2. Here, I'll solve this """debate""" for you, New York Times:

It's the pandemic.

Virtually every major country in the world is experiencing heightened inflation the likes of which they had not seen in years/decades, even though each has responded to the pandemic with a myriad of different policies.

Media outlets that pose bullshit questions like these are part of the problem. If it's a """debate,""" it's only because you are lazily writing about people's opinions on the topic rather than simply being fucking journalists and reporting on the actual situation many nations around the world find themselves in.

[orwell]

3. You are correct sir...

...last I heard President Biden was not elected Emperor of the World.

This is a global phenomenon of supply chain issues, commodity inflation, global stimulus, and labor price increases all caused by the economic shocks of the pandemic.

And producers are using the news headlines to implement price increases and boost profits, in many cases price increases far in excess of the operating cost increases.

[ProfessorGAC]

4. Ummm...

But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.

That money was pushed into the system because of the pandemic!
The two variables are autocorrelated.
"Some economists" are obviously morons.

[dsc]

5. It seems that looking at world wide rates

that we are slightly higher than most but not ridiculously so. Conversely we have one of the higher rates of growth in the developed world.

[Doremus]

6. What "rapid"?

Prices have been on the uptick for YEARS. Not only have prices gone up but sizes of everything from bags of flour and gallons of ice cream have shrunk.

My guess is "inflation" is the new repuke talking point to justify their opposition to anything Democrats want. Oh, and of course, they're waiting to grab up newfound profits in the aftermath.