What does MAGA love? Suffering.
“Vance was asked for his reaction to the Fed cutting rates, which would ‘alleviate inflation for a lot of people.’ Before he could answer, his crowd started to boo. This response was particularly odd considering the fact that cutting interest rates has the potential to actually be good news for everyone.”
Like lowering the price of groceries. The fed is lowering rates precisely because inflation IS lower.
@feloneouscat Perhaps I'm misremembering my economics classes, but from what I recall, I don't think a lower interest rate'll reduce grocery prices anytime soon:
Increasing availability of capital (ie via lower interest rates) is liable to act as short-run demand-side stimulus, putting upward pressure on prices.
Now, in the long run it *may* facilitate expansion of production capacity, but that assumes producers / middlemen want to do so instead of coordinating gouging via artificial scarcity.
If you go by the classics (which are wrong but the reason is too complicated to fit in a short post) reducing interest rates will trickle down to lower costs. In the same way monopolies mean lower prices 😝
It’s not WRONG, but it also isn’t RIGHT. 🙄
It’s literally the reason I didn’t switch to being an economist—the fundamental flaw in it was that much of it relied on himan interaction and interests. I saw it as never being a hard science.
Then some fuck realized it much later and got a Nobel.
(Sigh)
But, to be fair, I’ve had more fun as an engineer.
@feloneouscat The worst is when they refuse to acknowledge it.
One of many things that drove me nuts was the fact that the first models they taught all assumed people are perfectly rational actors w/ perfect knowledge of products & market state... leading to many an economics student loudly gushing about the "beautiful perfection" of markets.
The problem, of course, is that those assumptions are far more ridiculous than a spherical cow in a frictionless vacuum, & are intrinsically opinionated.
@feloneouscat The profs could at very least have started by memorably / dramatically demonstrating how utterly absurd and inaccurate those assumptions are (perhaps using real-world data to illustrate the point), to avoid imparting lasting illusions about the *actual* messiness and usually-irrational behaviour of markets, but instead they completely glossed over said assumptions as if they were negligible / totally reasonable.
Which... honestly made it feel a bit like being taught propaganda.
@feloneouscat Ah, yeah, okay, I think I know what you're talking about.
I forget that the way I think about/mentally model economics has diverged a bit from what seems to be the mainstream methodology.
For example, I like to smash economics together with adjacent fields like sociology & poli. sci., then attempt to reason about the combined morass instead of trying to work with each in isolation.
I find it gives better results, & often reveals "counterintuitive quirks" to be perfectly logical.