cross-posted from: https://lemmygrad.ml/post/1103408
Kept seeing this clip of Barry Sternlicht laughing about a “nice little recession” so I thought I’d share.
For what it’s worth, this isn’t the first time I’ve heard someone hoping for a recession. My stepdad told me this and I don’t understand why he’d want that.
According to him the only way to combat inflation is for us to go into a recession. But wouldn’t that cause a different form of chaos?
I’m uneducated on inflation vs recession but I know for a fact through lived experience that inflation sucks, and I’ve heard recession is also shit so why ask for one?
Anyway if this doesn’t belong here please let me know so I can post it somewhere else, I’m still getting used to what posts belong in what communities.
Raising interests rates to slow down the economy is the only solution to inflation neoliberalism has to offer. It’s the old Milton Friedman (?) trick, too many dollars chasing too few goods, and those too many dollars must be coming from working people earning too much money. The fact that inflation is primarily caused by profit seeking isn’t ever admitted to.
It does cause a different form of chaos (just look at the Volcker Shock of the 1980s for an extreme example), but it’s one the wealthy can easily ride out. It even helps them consolidate more wealth, as they have the capital to buy any assets that come onto the market during the recession. See how after the 2008 crash private investment firms bought up most of the homes.
There are other ways to combat inflation, some of those being price controls, market planning, and infrastructure investment, but all those things require chipping away at the power and wealth of the wealthy, so they aren’t even considered.
Not an economist, but I think I have an idea. Let’s call it recession 2.0. Sounds amazing and will tickle the mind of even the most conservative friedmanian economist.
Then in the fine print we put some price control mechanisms and a few limitations regarding the creation of profit.
Then in the fine print of that, we put some general market planning activities (that mainly regard the wealth accumulation of billionaires).
Then in the fine print of that, we casually mention that said wealth is to be rerouted towards infrastructure spendings of all kinds.
Booom, Barry gets his recession, inflation averted, prices go down, no one loses their job (or if… likely gets one outside of an office, how amazing is that!), everybody happy 😊👌
I remember learning only about supply and demand economics in middle school, inflation was only taught in regards to Germany in the 1920s in which inflation was described as “too much money circulating.” But I was always told it was because the people had too much money and not the wealthy. Obviously I know the contrary is true now but learning what all this economy stuff is currently is low key difficult, I’m sure I‘ll get it sooner or later. I just want to be able to explain these issues to others without getting brain scramble. As far as I’m aware, both inflation and recession are bad, at least for us.
Economics can be difficult to get into, but having a Marxist understanding of the world really helps. You’re also questioning mainstream bourgeois economics which is very important. It gets easier as you build up your base understanding, as with everything.
Hyper inflation, like what happened in inter-war Germany, is another thing altogether. It’s caused by extreme imbalances in currency exchange markets at the central bank level. Whereas consumer price inflation is what I already touched on briefly, and asset price inflation (real estate, stock market) isn’t discussed much at all.
I remember quite a few economics lessons from my high school years, but it wasn’t much of an education. The entire spectrum we were taught stretched from Keynes (socdem more or less) to Hayek (fascist, although that bit was left out of the teaching materials).