But right wing media tells me that I should feel differently!dajo9 said:
Real wages in the middle quintile are above pre-covid and above 2019 trendlines
https://www.threads.net/@paulkrugman7/post/C3Fuf8LOqer/?igshid=NTc4MTIwNjQ2YQ==
I've been thinking about this for a while and my conclusion is that people just can't internalize inflation. It's corrosive and it's one of the reasons old people are grumpy. My grandmother thought it was outrageous when I would pay $1 for a bagel. In her mind they were worth a nickel which is what she paid in the 1950's.
When people receive wage increases they attribute it to their industrious efforts. When prices rise, they shake their fists at the sky in protest. People are victims of price increases and over time the effects compound.
So you could argue that gas is cheaper in nominal dollars now than it was 10 years ago (because it's true) or the same as it was in May 2019 (also true) but a lot of people still think gas should be $1 per gallon because that's what it was in 1993. I paid $4.25 this week and feel pretty good about it because I remember when it was $7+ a few years ago.
Fortunately, inflation has come back down to normal and real wages continue to rise. This rate adjustment cycle will go down in history as one of the most effective central bank interventions of all time (perhaps the most). It's a massive win for US financial market regulators and yet another example of why we have the strongest, most stable financial system and economy. China and other economies are struggling now and it's not clear how they will be able to intervene. Meanwhile, thanks to the steady hand of the Fed and the Biden administration (which deserves credit for not f(cking it up the way Trump would have), we are now pretty much past the bad times and into the next expansion cycle.
Imagine the sort of pressure TFG would have put on J Powell last year during the interest rate hikes. I have no doubt that Powell would have been ousted and replaced with some jagoff like Larry Kudrow who would have reduced interest rates (bec they were bad for TFG's business) and we would be in deep sheeit right now. Instead, Biden's admin showed a steady hand and provided enough stability and support for the Fed's policies to do their job.
