What causes inflation? Economists Radhika Desai & Michael Hudson explain
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- Опубліковано 21 вер 2024
- In this episode of Geopolitical Economy Hour, economists Radhika Desai and Michael Hudson discuss inflation: what it is, what causes it, and what are the problems in how the Federal Reserve and other central banks respond to it.
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Absolutely brilliant episode. As an economic student I had no idea how deeply propagandized my education was until now. Can't wait until the next one.
This makes me so happy to hear. It took me hours of learning to figure all this out with many angry recapitulations back to the economics I was taught in school.
Here they are lucidly laying it out in one video. Keep studying economics! The world desperately needs people like you.
@@Kid_Ikaris Recapitulations?
I couldn't agree more with David. Keep studying economics. It truly is a defense against the propaganda black arts. When you finish your very one sided supply side formal education/indoctrination. Your real education begins after you start to apply what you learned and you find yourself wrong most of the time getting rewarded financially for being that way. It is important to realize early that there is the science of economics and the religion of economics. The religion for the most part runs higher education. The religion also controls most of your employment opportunities.
I believe there is an economic renaissance under way and you are going to be right in the middle of it. It is now possible to test your thesis with readily available data on the net. In other words, the science of economics is starting to exert itself. The holes that demand side economics fill nicely will become more and more relevant.
I suggest grabbing Dr. Hudson's literature. It has taken me some time, but I've acquired most of them and they are revealing. I do hope, however, that they are all rereleased in digital formats.
I also hope that Dr. Hudson is able to complete his trilogy on the history of DEBT.
Nixon cited war as the usual suspect in inflation. We're far more Macarthyist in how we justify war today and inflation is still part of it, though we'll never say that.
I met Michael Hudson at an economics conference in 2012 in Italy and since then I have never stopped reading his blog and following his interviews on youtube.
Destiney of civilization is not a big deal to read and it has a great payload as well.
Another amazing lesson given by the great Professors Radhika Desai and Michael Hudson! It's always a pleasure watching your 'Geopolitical Economy Hour'!
The most accurate discussion on inflation today
Congradulations to Ben Norton for snagging the best of the best and thanks for introducting me to Proffessor Radhika Desai, I hope to get a lot out of her.
Wow. I want to stand up and give a standing ovation! Great!
It is such a blessing to hear an honest conversation about our exploitation by the wealthy instead of the issue being framed exclusively by agents of the wealthy. Sharing this far and wide!
These conversations are great! Thank you Radhika, Michael and Ben!
So great that nobody ever talks about the content in the glowing comments. No war is inflation debate, no regs on real estate we once had. No context.
I believe we can find a solution for this hell that the neoliberals have created for the world, by bringing to light what they have done. And thankfully we have you and this very important discussion which I hope will become viral because it needs to. Thank you
Immensely thankful for this program!
Thank you very very much Prof Radhika Desai and Prof Michael Hudson, we are learning from the best minds, nothing like this in the MSM which is getting completely irrelevant, we'll be here in your next session to learn the fascinating process of de dollarization or like Prof Hudson says the end of the free lunch.
Transcript is not avalable yet....
Time to read some Hudson & Desai ✊✊✊
I spend a lot of time listening to content like this. Thank you for your dedicated work.
Alright... I have no idea how currencies are related to eachother.... I don't understand things like 'the dutch desease' as mentioned in 'super impirialism'...
@@urrywest That's weird, you're pretty much subscribed to all the channels I am. What are the odds of that?
you guys are such a blessing!
Most intelligent hosts and comments below prove a highly intelligent audience too
Best show out there. Many tnx ❤❤💯💯💯
The best economists in the world bar none. Thank you for this series. 🙏
Really good lessons, thank you! I'm feeling pretty discouraged right now with the war on Russia, sanction, government collusion with military and medical rackets. I don't see how we can get out of it here in the u.s.
Thanks for clarifying this very important topic.
If you are so smart what is the dynamics of relative currency valuations?...
I don't get it.
Two of the best left-leaning economists in the world today👍. One aspect of inflation that I wish they had emphasized is the fact that there are 2 very kinds of inflation that have two entirely different impacts on the populations that experience them.
Supply constriction inflation is the *bad kind of inflation.* When the quantities of ‘stuff’ that suppliers are bringing to market drop, prices will rise until some people are _priced out of the market._
That’s how The Marketplace rations scarce goods & services: according to one’s disposable income. It’s why the poorest members of society always suffer the most from Inflation that is driven by reductions in supply.
Demand-driven inflation is something quite different. Unrecognized by most observers is the fact that, in _real_ terms, demand-driven inflation is actually quite *_harmless_* in that it doesn’t involve any reduction in the amount of stuff that is being brought to market and purchased by consumers.
The key to understanding demand-induced Inflation is recognizing that it *only* occurs when buyers have seen their disposable *incomes* inflated . . . _enough_ for them to be able to afford the same stuff at a higher price that they used to buy at a lower price.
We know this must be true because, if their incomes had _not_ been inflated sufficiently for them to be able to afford the higher prices, the higher prices would not hold. Product would remain on the shelves unpurchased and prices would be forced back down.
The demand-driven inflation that The Fed fears is actually quite tolerable because, if the Inflation really is due to _incomes_ inflation, the price increases would be _fully compensated for_ by an adequate increase in buyers’ disposable incomes.
(The above is from a Medium article I wrote, entitled "Inflation: Misunderstood By So Many", in which I expose the essential flaw in Milton Friedman's & Fisher's conceptions of inflation)
God Bless you Michael and your family. Thank you.
Timestamps:
1:45 What is inflation? How has it been understood historically?
25:50 What causes inflation?
32:20 Why are the most powerful capitalist countries suffering from inflation?
38:05 What is causing the current inflation?
40:00 What is the fed doing? (And extremely important explanation of central bank and federal reserve power)
48:20 What is wrong with it?
I was looking forward to this episode. Double checked the channel the past 3 days expecting the next one. Thank you for this.
Thank you for sharing the truth about the US economy, the nature of money, the role of the Fed, Milton Friedman’s lies, and the actual state and causes of inflation.
Thank you both for your invaluable info !
Valuable economy lessons from this professors on inflation and not those so called experts such as Powell's, Janet Yellen and former IMF chief,saying the inflation are transitory.
This was so amazing: well thought out and extremely thought-provoking. Thank you, and I look forward to the next episode on de-dollarization! Pls also do one on how other countries structure their central banks (eg China, Indonesia)
Thanks!
Another extremely thorough lecture. Much better than what l ever had at university. 👏 Bravo!
I Loved listening to Radhika, almost as much as I loved watching her……. Superb.
Fantastic work you two are doing. An understanding of what is going on in our larger world and how we got here couldn't be more important now. Thank you! Will definitely be sending support.
This was simply fantastic. Thanks so much for the programming. Very shareable explainer to send to certain loved ones.
!!!! Im waiting for this show everytime. Thank you so much. Your all wonderful
This is so good. Thank you!
Thank you both so much. Absolutely invaluable work!
Thanks! Great series.
So keen on this video!
What a great class. Americans and countries of the G7 have been so duped, brainwashed and betrayed under the illusion of a democracy or republic. Thank you. I love you both. Together you are priceless.
There are so many insights and revelations in this vídeo that i want to send to all the people I know. The problem is I know so few people with the basic knowledge to extract the hugely important meaning from this, I just wish there would be more economic education among the general public.
I so appreciate being able to listen to these discussions. You are teaching me so much.
I am pleased to have "stumbled" on this series and channel. Thank you both for these discussions! I would love to see these two have Prof Richard Werner on the channel to talk about these issues as well. I think you may have many things in common. 🙏
Asset price has been the biggest thing for me (house) which feels incredibly unstable for even some who has worked over 40hours a week, donated blood plasma. Saving 80% of their money living with their parents for 7 years... It's bullshit. Was finally getting close right before COVID... Then it hiked right now of achievable again.... And I'm one of the lucky peeps, who has gotten a lot of breaks! Can't imagine what it's like for people who rather then catch breaks, get hit with problems.
Thank you
As a layman who sees things are wrong but does not understand why
You enlighten my thinking
Excellent discussion. Great information
I love you guys thanks for your work.
Brilliant session. Thank you.
Thank you
Great discussion. Being an economic novice, I saved the transcript to review help me understand the concepts. Thanks for posting the transcript.
Love this podcast
Thank you for expanding my understanding of inflation. These shows rock!!
Thank you. Most of it went over my head though. I'll have to read up more about this subject.
It's "easy". Starve the poor, feed the rich. Profits over people. Socialism for the rich, capitalism for the poor.
Every American needs to read and comprehend Destiny of Civilization by Michael Hudson, it really informed my understanding of things. Thanks for this content, great stuff! Humanity could be so much more advanced but we have hedonistic sociopaths that refuse to stop being parasites
Very informative, thank you!
it would extremely helpful if, at some point in the future, the hosts had a detailed discussion of the balance of payments, starting from first principles: what it is, how it works, its place in US monetary hegemony. it's an extremely important topic, one central to hudson's work on superimperialism, and quite difficult to understand, especially the complexities of exchange rates.
This was such an excdptional discussion, thank you soo much for condensing so much knowledge in one hour. A question: would you recommend a book (or even some peer reviewed paper) which tackles the inflation question head on from your perspective? Maybe @GeopoliticalEconomyReport could help..
Super educational. Thanks for sharing your views 😊
YES KEEP BRINGING THEM ON !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thank you! Shared.
Great discussion and understanding of capitalism
I love these oldies! My respect and admiration for both of you!
Brilliant.thanks
I don't see enough leftists clarifying the difference between industrial capitalism and monopoly capitalism, and this is the most common No True Scotsman argument I see from right-wingers -- that nothing we observe around us is the result of capitalism because capitalism has been replaced by "corporatism" or some such.
When I finally read Lenin's _Imperialism_ it was a lightbulb moment for me. He discusses the inevitable progression in detail, and luckily we still have political economists like Radhika and Michael continuing that work.
Great show thanks to both of you! The sad thing is people need to understand why they try and push to the fringe people like you; you know the neocon neoliberal capitalist game and the indication is you can see its inevitable decline, especially in the western world!!
Great video
Hudson is the goat.
Every time I see Michael Hudson I click
Fantastic episode!
I'm curious about The Fed's various methods of printing money. I've heard about 'Quantitative Easing', of course, but I've also heard about another tool: the Fed 'Reverse Repo Facility'. As I understand it, banks with cash just put it at the Fed overnight, and the Fed gives them a percentage of money interest. The facility has greatly expanded in the last couple years, with banks parking a record 2.5 trillion in this facility. Where does the money that the Fed uses to pay the interest on this come from? Is it also digitally created money? If so, that is another daily source of inflation, which trickles into the financial sector, probably to be used for salaries/upkeep costs.
That 2.5 trillion parked overnight also represents what I've head referred to as a 'capital strike'. Banks, instead of using their cash to do things like spur development that might create useful productive jobs, instead is just hoarding the capital and not using it productively.
Well that's an interesting question! I hope you get an informed response (sadly I cannot offer one).
The main cause of inflation is caused only by unregulated buying and selling. The cause: People who can, raise prices doing so.
Prices are driven up by the issue of debt.or as you call it money .but it aint money it was never earned by any one .
@@rickydee5863 yet people still trade goods and services for it
@@rickydee5863 Prices are driven not always by the "supply/demand formula of the economists but by people trying to take far more than their share of the wealth.
@@raykirkham5357 if you print money asset prices are inflated .more money to compete for all assets .whos got the money is irelevant ..
@@rickydee5863 The money they create to finance an $800 billion military is deficit spending with people who do not invest anything in our real economy and make things that have zero value in a civilian economy. If the money produces value added within a society then inflation will be reasonable. It it buys military equipment, out society really contains no redeemable value. The money hangs around however and if the MIC spends it on itself (the usual way) the inflation due to all this funny money is worse. But Moderna raising the price of its vaccine from $30 per dose to $100 per dose is an inflationary factor due solely to GREED.
Good informative video. Please let Michael Hudson have his turn in tge conversation too he doesn't get enough time.
9:55 yes, I like how they suppress wages, while blaming wages. And they never mean the executive's "wages". Those greedy poor people. 🤨
Truth of the story
They suggest keeping government influence out of the Fed is to protect ‘our’ interests;
What we really do is allow the Fed to dictate economic policy without interference by democratic procedure
Americans have no faith in democratic government because because the entire electoral process is controlled by corporate interest and we can imagine nothing else
Great and instructive exchange
Wow!!!
I'm priviledged to be able to watch this
@19:00 the FED does not and _cannot_ "print money." As Hudson said earlier, all money is debt. It has to net to zero. So when the FED does "quantitative easing" they are swapping dollar denominated assets for reserves. No new USD are created. Only the US Treasury can literally mint coins and notes, and only Congress can issue dollars by fiat. The FED cannot.
But even when Treasury mints notes or coins, they still must book it on the balance sheets as their liability. The USD is a tax credit. Government must accept it back in payment of fees, taxes or fines owed to the state, otherwise it'll go to zero demand.
good analysis, we should ask more WHY
I'm glad someone is talking about this, and the fact that inflation isn't some natural law that somehow is imbedded in the money supply when anyone in the real world with half a brain can see that it isn't. Anyone can see it when the prices for their goods are raised for just no reason, and then you say its inflation or the company's costs have increased, that's bullshit when the proof is the companies profits jump massively. Inflation is going to be one of the things(there's so many) that kills us eventually. We're getting close to that end already in the UK, every company and government bills everything is justified in raising there prices by inflation, because you can't have companies losing money. So you end up with massive inflation where the worker cannot keep up.
Except the workers aren't allowed inflationary or even under inflation wage rises because that could result in a wage price spiral, which there is no evidence for(its just the rich's lie and justification for keeping you poor you fricking idiots), meanwhile all these companies are posting record breaking profits, they can't share more of that to the workers that would be immoral. You can see how this will end in an already poverty stricken country with thousands of food banks. In the end only a few companies will be able to make any money as they've sucked the whole country dry, while fifty percent or more of the people are permanently queuing at the food banks begging for scraps.
edit: And brilliant for quoting the actual causes of the so called boogyman hyperinflation, paying foreign debt. It really is like we are in some Twilight world where we have plenty of sciences that work really well to come up with evidence and theories that are tested. Whereas economics we have a farce of lies and beliefs and its obvious where no one is paying attention to the real world.
The capitalists feel about inflation somewhat the same as they feel about fascism. Up to a point when they think they can control it, they welcome it but at the same time fear it.
Both unemployment and inflation drive down the market value of labor in real dollars as against the value of asset investment and return on debt.
Rentier overhead is a debit to the accounts of the workers but a credit to those of the capitalists; the resultant flow of capital is a huge transfer of wealth to the wealthiest.
IF the solution to inflation is really to create higher unemployment, then it is only logical that the groups responsible for the economy lead the way. A graduated scale would make sense. If inflation ends up being 1 % above target then, 10% of Treasury & Wall Street employees should be laid off. At 5 %, layoffs of that segment would be 50%.
Once that has become the standard practice, we will see if their thinking remains the same.
Pay those greedy workers less. Exactly, seven dollars an hour is way too high.
these videos are great ideas. noice
"We will create employment by creating unemployment, we will boost workers' incomes by shrinking their incomes, we will dig the economy out of its indebtedness by creating more debt." It sounds like the patients are in charge of the asylum at the Fed.
This doesn't make any sense. Our economy is so unequal that increasing interest rates actually gives more money to people who have it to loan. It doesn't hurt aggregate demand much at all. It redistributes income from people who borrow to people who loan. The interest income channel alone in theory can actually increase aggregate demand while the ordinary person sees their real wages decrease.
@8:00 the higher rates and the Volcker shock were pro-inflationary. Volcker exacerbated the inflation, he did not cure it. When the government Treasuries/GDP ratio is over 50% or thereabouts, the government is a huge net payer of interest-income _into_ the economy. This supports bank credit and price structure, and directly increases the term structure of prices. Higher rates promote inflation under thee conditions, so today in the post-COVID era, that's what we are seeing: more jobs added, higher GDP, all due to higher interest-income. the problem is, it's all going to the wealthy bond holders and trust funds. It is not "monetary tightening" it is monetary injection, the opposite of what Radhika says.
QQQ - Is MMT policy practiced by g7 network a reason for core inflation?
Great stuff but you failed to mention Gaugeflation and the opportunistic aspect of swindlers using Inflation as the excuse to rob the Working Class.
Big Hud hates Andy Warhol prints
It's not true that you need some inflation for economic growth. Indeed, the opposite tends to be true - that inflation is higher than the rate of growth. The 19th century in Britain saw great economic growth and capitalist profits (though there were economic recessions) but in 1901, when Queen Victoria died, prices were only worth 90% of what they were when she came to the throne 63 years earlier. Years of negative inflation were normal then, balancing out the years of inflation. Since 1934, however, we have not seen one year of price decrease, even after World War Two or during any recessions.
Surely under sanctions we have cost push inflation rather than demand led inflation
So, as with your first installment, what type of policies and laws should be advocated at the LOCAL level?
Capitalism was not intended to "work properly." It was intended to be pushed to the forefront because it is the system that best minimizes the time required in selling cooperation in maintaining a hierarchical gas-light. Personal time is the most valued and limited resource.
Why do the debts have to be written off? They could just be bought outright for printed cash, created without debt. That would save the system in nominal terms. You would get hyperinflation, sure, but writing off the debts would also create total economic and social destruction. System can die by fire or by ice.
Hudson paradox and the corollary; one driving inflation down and one driving it up? Who wins? The majority in this inflationary fight; the 90% wins (@25:13)
Let me see how people here take to my explanation. Private banks do not create money. They create promises of money. The promise is that if you ever need "real" money from the private bank, they will find enough "real" money to satisfy your needs in the form of Federal Reserve Bank money. One example shows what I mean. When you go to a bank's ATM to withdraw money, you get Federal Reserve Notes. You don't get anything that represents private bank money.
Another question to ask, is "If private banks create money, why don't they just create more of it when there is a run on a bank?"
What is it that the Federal Reserve Bank creates that satisfies the demand that private bank money cannot satisfy?
Where is the debt that came from the trillions of dollars the fed created to stop the crash of 2008/2009? The only debt was the USA government's promise that you could pay your taxes with Federal Reserve Bank money. Why did China need so much Federal Reserve money when they were not subject to USA taxation?
Isn’t it that asset inflation shields the consumer price inflation. Imagine the shareholders all try to cash in their holdings. The cash will flood the street. On the other hand, assets such as the stock market acts like a reservoir by sucking up excess cash. However, this reservoir not only collects rains- the printed money- it also proactively sucks water from down streams back up to the reservoir, leaving not enough of water for ordinary people. I think Prof Hudson has a good point. Is there a math model to quantify the inflation beyond money supply, to include the rentier infrastructure suggested by professor Hudson?
Ludwig Von Mises has explained all of this since 1912
I would love to have a clip of 36:16 to 46:29 to share.
Can someone explain to me what they mean by “asset inflation “ ? Do they mean inflation in financial instruments and land or something else?
Reason i ask, is idk what asset is and i ve seen like a trillion different definitions for it.
If inflation is too much money chasing too few goods, and given stagnant or sinking wages and rising prices in housing, rent, health care, education, etc., then what we should see is too little money chasing too many goods, or deflation. Does this not make sense?