Your take is correct and fair. Periods of high inflation are very damaging to everyday people if that inflation isn’t uniformly applied, which it rarely is. “Recession” doesn’t really accurately describe that situation and we don’t have a good term for it.
Basically right now banks are making money, but both wall street and (most of) main street is losing out.
The problem is when there’s inflation, prices are very elastic (they go up fast) but wages are more inelastic (they go up much more slowly). While ideally wages and prices should be equal, it doesn’t work out that way in reality.
The subsection of main street that’s in in-demand industries captures most of the wealth in this scenario. So extremely low wage earners are actually seeing some real wage growth, and so are some sectors of skilled workers, but most of the middle class is seeing their wealth go down.
Most of the wealthy who have all their money in stocks are also seeing their wealth stagnate.
The good news is, we’re starting to see cracks in the dam. Since unemployment remains low, employers are being forced to raise wages now, especially given all the union action lately. I tentatively predict that as long as we’re not pushed into an actual recession, living conditions will start to get better over the next few years for main street. That’s why I’m saying go Powell go. Keep fucking wall street over. Put the screws to em. It will get better for us as long as unemployment stays low. Corporations have been using all the tricks they can to keep their profit margins despite the pressures on them, but they’re running out of tricks. They’ll have to eat into those margins soon.
Your take is correct and fair. Periods of high inflation are very damaging to everyday people if that inflation isn’t uniformly applied, which it rarely is. “Recession” doesn’t really accurately describe that situation and we don’t have a good term for it.
Basically right now banks are making money, but both wall street and (most of) main street is losing out.
The problem is when there’s inflation, prices are very elastic (they go up fast) but wages are more inelastic (they go up much more slowly). While ideally wages and prices should be equal, it doesn’t work out that way in reality.
The subsection of main street that’s in in-demand industries captures most of the wealth in this scenario. So extremely low wage earners are actually seeing some real wage growth, and so are some sectors of skilled workers, but most of the middle class is seeing their wealth go down.
Most of the wealthy who have all their money in stocks are also seeing their wealth stagnate.
The good news is, we’re starting to see cracks in the dam. Since unemployment remains low, employers are being forced to raise wages now, especially given all the union action lately. I tentatively predict that as long as we’re not pushed into an actual recession, living conditions will start to get better over the next few years for main street. That’s why I’m saying go Powell go. Keep fucking wall street over. Put the screws to em. It will get better for us as long as unemployment stays low. Corporations have been using all the tricks they can to keep their profit margins despite the pressures on them, but they’re running out of tricks. They’ll have to eat into those margins soon.