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"The tools that the Federal Reserve are using are fundamentally directed at reducing inflation—wage inflation, not markups. They don't really understand it because they've never read Kaleski. They're neoclassical economists. They think ... Milton Friedman is right, and fortunately, Milton Friedman was wrong." --- Join ~10,000 Other Truth-Seekers by Downloading my new 'Funny Money' Bundle for Free at https://new.stevekeenfree.com Are you an engineer, finance, or IT professional? If you are, the 7-Week Rebel Economist Challenge is for you. If you qualify, I will work closely with you every week to install 50+ years of real economics into you, in only 7 weeks. Working closely with the 5 best applicants this week. Apply here: https://apply.stevekeenfree.com -- Who is Dr. Steve Keen?
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"The tools that the Federal Reserve are using are fundamentally directed at reducing inflation—wage inflation, not markups. They don't really understand it because they've never read Kaleski. They're neoclassical economists. They think ... Milton Friedman is right, and fortunately, Milton Friedman was wrong." --- Join ~10,000 Other Truth-Seekers by Downloading my new 'Funny Money' Bundle for Free at https://new.stevekeenfree.com Are you an engineer, finance, or IT professional? If you are, the 7-Week Rebel Economist Challenge is for you. If you qualify, I will work closely with you every week to install 50+ years of real economics into you, in only 7 weeks. Working closely with the 5 best applicants this week. Apply here: https://apply.stevekeenfree.com -- Who is Dr. Steve Keen?
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| "The tools that the Federal Reserve are using are fundamentally directed at reducing inflation—wage inflation, not markups. They don't really understand it because they've never read Kaleski. They're neoclassical economists. They think ... Milton Friedman is right, and fortunately, Milton Friedman was wrong." --- Join ~10,000 Other Truth-Seekers by Downloading my new 'Funny Money' Bundle for Free at https://new.stevekeenfree.com Are you an engineer, finance, or IT professional? If you are, the 7-Week Rebel Economist Challenge is for you. If you qualify, I will work closely with you every week to install 50+ years of real economics into you, in only 7 weeks. Working closely with the 5 best applicants this week. Apply here: https://apply.stevekeenfree.com -- Who is Dr. Steve Keen? Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory. Engineers, finance professionals, and IT experts will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields." |
Are mark ups simply created by goods and services providers. If you add more margin and get away with it “why not”.
Why the Fed Fails at Inflation – Because the current Communism-disguised-Capitalism system.
What's called Inflation is a product of this system that wouldn't be possible if fossil fuels were not traded under the fake "supply and demand" doctrine.
Finite fossil fuels are dangerously hypnotic to humans, their consciousness, reasoning and mental capacity.
"No matter how highly mechanised and self-powered, fossil fuels extraction requires a number of people – as if the process is executed by hands using buckets and ropes – by physics".
Today, this number is 8 billion people – working flat out 24/7 – strong.
Our Western Civilisation has been no more than fossil fuels extraction management operation since mass extraction of early coal.
Humans were not ready morally, ethically and intellectually to start the mass extraction of fossil fuels with the advent of the steam engine 300 years ago.
Seven years of abundance followed by seven years of famine.
"In any system of energy, Control is what consumes energy the most.
No energy store holds enough energy to extract an amount of energy equal to the total energy it stores.
No system of energy can deliver sum useful energy in excess of the total energy put into constructing it.
This universal truth applies to all systems.
Energy, like time, flows from past to future" (2017).
Gee it’s almost like wealth concentration, profit and its pure monetary version, interest rates, are cancer. Just like philosophers figured out millennia ago. That companies are soaking up 30-45 or more % rent, I mean mark up, has been reported on for months and years. Never happened before right? That consolidation is at the heart of it has also been flagged for *decades*. The Sherman act was effective until Bork. The systemic solution is well known.
Inflation is much worse now. Than it was in the 1970s, I was alive in the 1970s. Groceries didn't go up by three or four times in the nineteen seventies you gotta look at reality and get your head out of your models
So clear. Thank you Prof.
Let me get this straight. Prof thinks that an increase in Govt and price controls will fix part of the problem? We are really f'd
The government did not “fail” at inflation, we got it in spades.
@@timursalikov5911 Govt fails at everything it touches. Once you realise that the quicker we get out of this mess
So higher interest rates cause businesses to increase markups, so if the central banks didn't change the interest rates during the pandemic, and instead the government only provided financial support, then it may have been smoother. Never waste a good crisis aye, quick drop interest rates.
Never waste a good crisis, quick drop interest rates! Higher interest rates are forcing businesses to markup prices.
Keen should do the same analysis with the money supply M2 and asset prices. Nothing to do with wages, markups flow from increases in M2. I would love to see Prof Keen and Steve Hanke debate these topics
Why doesn’t inflation include asset prices? Ignoring this is a wealth transfer to capital. Selectively intervening only when consumer prices rise is the another gift for capital, as it protects their accumulated wealth from asset sales. Higher interest rates further rewards capital with an higher, safe, return from or protected by public budgets. This actually increases short-term inflation, but long-term liquidity crises, because new loans create money, but do not create the interest liability. Meanwhile, harms to communities and nature are nowhere reflected, while falling demand and a new investment cycle resume destructive extraction and exploitation with new loans and higher asset prices again.
Dr Keen could be a bit more classy. His library is paltry and his shirt is I’ll-fitting.
There's multiple factors that affect inflation. Supply demand, money supply, confidence and faith in the currency, and psychology.
This is the problem with economists these days. Trying to deduce human nature down to a mathematical formula. Then use it as a model.
What have you economists brought us in the last 100 years?
Where were the solutions professor when inflation was shooting up to 4% last Oct? And ffr above 5%? With a looming recession that would have occurred by now?
How did Fed get so lucky?
Beautiful. Thanks for demystifying this “controversial” topic.
I am interested. Could you do a podcast in layman’s terms.😂
Yes, this is a sound and revealing data visualisation, great work mr. Keen! I have this question, about how median income vs median housing costs (both buying and renting) plays into this data.
I ask, because data shows this ratio having gone from 2-4x to 7+ x in most OECD countries just over 40 years. Young adults report (anecdotally, their perspective) that this ratio holds them back from “reproducing society”. Having kids, and take on their expected roles.
A close second is student debt, just as higher education became the norm rather than the outlier across the same 40 years.
To me, this shows how GDP (also pc) becomes extremely flawed, as the levels of personal debt – and the ability to carry it 30 years into the future – don’t seem to reflect in the metrics behind GDP.
Doesn’t “productivity” change a lot, when much of it happens within finance – and finance goes to “assets” (rents, interest) more than to “goods” (end sales, consumption) across these 40 years?
Are we describing an economy without internalising where growth and losses occur – and the changing legal differences between corporate entities and the person subjects?
I agree with everything you say here. Yes, by letting the economy be dominated by the financial sector, we've made housing unaffordable, higher education debt is now making it difficult for anyone without rich parents to buy a house, and finance is a cost of business, not a profit centre, so real business is less profitable and economic growth has actually fallen thanks to Neoliberalism.
@@ProfSteveKeen I deeply appreciate your comment, mr. Keen…!
I’ve been hammering this out since looking into QE & macro after 2008, on a local (Norwegian) and OECD frame of reference. Of course, we share the same consequences from the same transnational policy agenda.
Keep up the great work on your analysis tools, and important efforts to ground economic understanding on knowledge and data. 👍
Steve Keen is way to wordy and takes forever to tell you the causes —— Just tell average person what it is and stop with the math and the word salad. INFLATION COMES FROM 3 Place – Monopoly Pricing, Credit Expansion, and Govt Policy. Last two show how constant stimulus is necessary for HIGHER PRICES. You can have inflation when you have monopoly pricing (monopoly sets price & we have 5000 corporations that make everything in world &- they collude — Look and InBev as an example), second type of inflation NEEDS STIMULUS – where is the stimulus coming from
-in case of Covid Govts giving people free money –but stimulus can come from Govt competing with average person like in healthcare or rental (govt programs drive up costs), lowering interest rates allows person to take on more debt without making more money drives up house prices, govt regulation which allows not credit worthy people to get mortgages drives up prices this also happened with Student Loans and education costs —- and Govt policy like tariffs.In my point of view this is an circularargument. You have to Put all sports of asumtion in to an algebraic asumtion. You will stille end up with the value of capital and if you create enough of it, it will deacrese in value. This is the only stringent casation. If you have to much of one of the Key komponents (labour, land and capital). The component that is most abundant will fall in price to the others, and the other way around. The problem is land(natural recoursess) not work or capital. But in every video it is only work and capital that are being tanken up.
I always tend to think of money’s relation to inflation not as causal, but as an enabling factor.
The government printing money ENABLES inflation to happen, but it also enables growth. Whether you get inflation or growth depends on factors outside of the money supply, but with a stagnant or shrinking money supply you can’t get either of them.
Can we use the term price-gouging to mean the same thing or similar to "mark-ups"?