8 votes

Weekly US politics news and updates thread - week of October 11

This thread is posted weekly - please try to post all relevant US political content in here, such as news, updates, opinion articles, etc. Extremely significant events may warrant a separate topic, but almost all should be posted in here.

This is an inherently political thread; please try to avoid antagonistic arguments and bickering matches. Comment threads that devolve into unproductive arguments may be removed so that the overall topic is able to continue.

14 comments

  1. [11]
    HotPants
    Link
    The Great Resignation is ripping through the restaurant industry Wage inflation. It will not be kind. r/antiwork

    The Great Resignation is ripping through the restaurant industry

    Domino's says it's raising wages at company-operated restaurants and speeding up new hire applications to address the issue.

    Wage inflation. It will not be kind.

    r/antiwork

    4 votes
    1. [10]
      dubteedub
      Link Parent
      What do you mean by wage inflation here? I am not very familiar with this concept or the r/antiwork subreddit.

      What do you mean by wage inflation here? I am not very familiar with this concept or the r/antiwork subreddit.

      6 votes
      1. [9]
        HotPants
        Link Parent
        Wage inflation is nefariously circular, wages go up, so prices go up, so wages go up more, so prices go up more...

        Wage inflation is nefariously circular, wages go up, so prices go up, so wages go up more, so prices go up more...

        2 votes
        1. [4]
          MimicSquid
          Link Parent
          As opposed to the current situation where wages don't go up and prices go up anyway?

          As opposed to the current situation where wages don't go up and prices go up anyway?

          7 votes
          1. [3]
            HotPants
            Link Parent
            Which is clearly unsustainable. The risk is that price inflation will lead to wage inflation which will lead to circular inflationary increases, which will force the fed reserve to hike rates,...

            Which is clearly unsustainable.

            The risk is that price inflation will lead to wage inflation which will lead to circular inflationary increases, which will force the fed reserve to hike rates, which causes untold bubbles to pop, which will cause everyone to be afraid of a second great depression...

            1 vote
            1. [2]
              MimicSquid
              Link Parent
              Is there an elegant solution to the problem? It seems like all the choices are bad, or have the potential of being even worse.

              Is there an elegant solution to the problem? It seems like all the choices are bad, or have the potential of being even worse.

              1 vote
              1. HotPants
                Link Parent
                The solution is to thread the needle, slowly reinflate things and slowly raise rates. The market currently doesn't seem too worried. The last time the Fed wanted to taper bond purchases, there was...

                The solution is to thread the needle, slowly reinflate things and slowly raise rates. The market currently doesn't seem too worried. The last time the Fed wanted to taper bond purchases, there was a huge tantrum.

                1 vote
        2. [4]
          streblo
          Link Parent
          How is wage inflation different than regular inflation? Throughout history we can see a relationship between inflation of goods and wage growth. Obviously the speed of that feedback loop is...

          How is wage inflation different than regular inflation? Throughout history we can see a relationship between inflation of goods and wage growth. Obviously the speed of that feedback loop is potentially a cause to raise rates but I don't think the cycle is inherently unstable?

          2 votes
          1. [3]
            HotPants
            Link Parent
            Wage led inflation is more likely to be a permanent issue than supply shock driven inflation (might be temporary)

            Wage led inflation is more likely to be a permanent issue than supply shock driven inflation (might be temporary)

            2 votes
            1. [2]
              streblo
              Link Parent
              I'm just trying to make sure I'm following. Inflation can be more temporary via supply/demand shocks or more permanent via changes to money supply/velocity. It makes sense to me that wages are...

              I'm just trying to make sure I'm following.

              Inflation can be more temporary via supply/demand shocks or more permanent via changes to money supply/velocity.

              It makes sense to me that wages are sticky, and that wage inflation in response to supply shocks isn't ideal.

              But if the inflation is driven from the increase in money supply -- isn't wage inflation just on track to behave how it always does -- i.e. it's the change money supply/velocity driving wage and goods inflation and it's not a circular relationship?

              1 vote
  2. HotPants
    Link
    Jobs Report Keeps Fed Taper on Track for November Last time the fed tapered, there was a financial market tantrum. It looks like there is no taper tantrum this time You can see the correlation...

    Jobs Report Keeps Fed Taper on Track for November

    Last time the fed tapered, there was a financial market tantrum. It looks like there is no taper tantrum this time

    You can see the correlation between US federal reserve asset purchases and the overall US stock market here and here

    3 votes