Thursday, May 13, 2021

Trees And Inflation

It's a travel day, so this will be short. Heading back to the desert in a few hours. Apologies for spelling or grammatical errors I didn't catch in the first draft.

I figured out why I like Dixie so much. It's warm, green, friendly and has plenty of water. That's also why I like Maui. Maui has better snorkeling and diving, but I prefer the food and people in the deep South. I stumbled upon the comparison when I took this photo of a massive tree in the front yard of my VRBO place. It reminded me of the road to Hana.


I read only a few econobloggers these days and they're all nearly apolitical and very data-driven. They're not making much of the inflation scare, but I wonder if they're not misapplying lessons of the past. Yes, this is a boomerang moment in the economy and some inflation is expected, but it's compounded by an attack on production through taxation and regulation.

That is, we're printing money like mad at the same time as we take steps to prevent goods and services from making their way to market. We pay people to stay out of the workforce. We shut down pipelines. We keep schools closed, forcing parents to stay home instead of return to work. And then there are all the little, niggling regulations that come with the modern Ds.

More money and fewer goods gets you worse inflation than more money and the same amount of goods.

Just a thought. 


tim eisele said...

I kind of suspect that the "lessons of the past" that the economists are dealing with, are that they have a very poor track record of past accurate predictions. This is not surprising, since their actual useful data is pretty much always late, incomplete, and subject to modification for political reasons. If they actually showed the error bars on their predictions, they would be enormous. And then, even if they do manage to make a prediction that would have been accurate, the money people then proceed to act based on this prediction. And these actions then disrupt the things that would have made the prediction happen, and as a result make it so that it doesn't come to pass after all.

It's kind of like making fluid dynamics calculations, except that all the individual water molecules are aware of your predictions about the way they should behave, and then they intentionally try to thwart you so that they can gain advantages over the other water molecules.

Kelly the little black dog said...

I'm afraid to tell you that you are living on the wrong side of the Rocky Mountains if you want warm, wet and green.