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wfrost

@wfrost.bsky.social

1.1K followers 1K following 9.4K posts

Sound Money (Democratic) Socialist, Montessorian, and Rortystan

Posts Replies Media

wfrost @wfrost.bsky.social · 7h

This would be a lot easier for all if people who could pay off their cc did!!

wfrost @wfrost.bsky.social · 7h

Also agree the 3 months of savings seems a better measure

wfrost @wfrost.bsky.social · 7h

My understanding is the methodolgy counts "cash or its equivalent" as cash savings or a credit card paid off at the next statement So it’s overstated to say 37% are stuck (that’s close to 12%) but it’s still a sign of economic distress if you cant pay off a $400 credit card charge in 30 days

wfrost @wfrost.bsky.social · 08/10/2026

And it’s the official policy of the fed to provide aggregate price growth each year for producers. We’re choosing perma-inflation, for corporations, not labor.

wfrost @wfrost.bsky.social · 08/10/2026

In serious, I wonder if services closers to the living wage, without long-term nominal contracts, adjust faster to inflation than say, salaried knowledge workers?

wfrost @wfrost.bsky.social · 08/10/2026

Babysitting = ipads

wfrost @wfrost.bsky.social · 08/10/2026

Shifting bottlenecks often come before productivity gains. I don’t see this as a “bad” outcome for AI coding, especially given output quality improvements in the past three months.

Reposted by wfrost

Karthik Sankaran @rajakorman.bsky.social · 08/10/2026

Socialism is when you replace status with contract.

wfrost @wfrost.bsky.social · 08/10/2026

Agree none of this is really a fed problem. ngdp maybe a touch high but household savings dropping so it all points back to the need for supply and deflation

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wfrost @wfrost.bsky.social · 08/10/2026

Got a lot of ground to make up. They do have the advantage of the integrated office suite, but as MSFT shows that doesn’t guarantee success

wfrost @wfrost.bsky.social · 08/10/2026

By “bad” do you mean a decline in real gdp? If so, you’re wrong. If not, what standard?

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wfrost @wfrost.bsky.social · 08/10/2026

Agree, would only add that sometimes planning leads to the conclusion, “actually the market is better at this than any one person making decisions.” And thats ok

wfrost @wfrost.bsky.social · 08/10/2026

Voters are not idiots to want prices to fall when the unit cost of production declines

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wfrost @wfrost.bsky.social · 08/10/2026

Such reading supports his conclusion: there is no reason to fear deflation caused by input (or productivity) growth. The idea that all deflation = bad is an economic myth, a hangover of Great Depression trauma

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wfrost @wfrost.bsky.social · 08/10/2026

Agree, compositional changes (especially fast ones) can be problematic

wfrost @wfrost.bsky.social · 08/10/2026

Sure it can. If you maintain a constant birth rate, and then have a lot of old people die say to a global pandemic, you get population decline with a higher % of younger generations

wfrost @wfrost.bsky.social · 08/10/2026

Population composition can be a big issue, which sometimes occurs when populations decline. But thats a question of distribution, not aggregate size

wfrost @wfrost.bsky.social · 08/10/2026

Also false. From 1990 to 2019, US real GDP per capita rose about 55%, compared with about 27% for Japan. Measured per working-age adult, it's about 61% and 49%.

wfrost @wfrost.bsky.social · 08/10/2026

wfrost @wfrost.bsky.social · 08/10/2026

It’s ok to be a Singapore or a Japan

wfrost @wfrost.bsky.social · 08/10/2026

gdp is not an end in itself, per capita gdp is much more important

wfrost @wfrost.bsky.social · 08/10/2026

“I think people trying to figure out the intellectual basis of the Trump administration are mostly trying to answer a question that doesn't make much sense.” 100%

wfrost @wfrost.bsky.social · 08/10/2026

Hmmm If looking at the birth rate helps identify real problems that people are facing that prevent them from having kids, then great. I’m on board. But that’s different than saying a high birth rate is a desirable end in itself. Are you arguing for one or both?

Reposted by wfrost

Dom White @domw.bsky.social · 08/10/2026

This is Michael Pettis rage bait.

wfrost @wfrost.bsky.social · 08/10/2026

Yeah, agree re: the order of focus. UCC (or close) is a great example of policy that delivers a lot of social benefits and very low (maybe negative?) net cost If that helps someone start or grow a family who couldn’t otherwise? Fantastic

wfrost @wfrost.bsky.social · 08/10/2026

Like if solving a real problem for folks leads to a higher birth rate, great. But putting the cart before the horse feels gross

wfrost @wfrost.bsky.social · 08/10/2026

Tangential, but I also don’t like the idea of targeting a birth rate. If people dont want to have kids? That’s their choice, leave them alone. Will ngdp fall if population declines? Yeah, probably - but so what?

wfrost @wfrost.bsky.social · 08/10/2026

I love the idea, but I’m concerned about unsustainable flows and public resource constraints. Thoughts?

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wfrost @wfrost.bsky.social · 08/10/2026

You mean like 100% anybody can come an go? Or something more limited?

wfrost @wfrost.bsky.social · 08/10/2026

Yes, agree 20% deflation in one year is not desirable. But 2% per year to match productivity growth? Delightful.

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wfrost @wfrost.bsky.social · 08/10/2026

The solution here is not product tariffs but rather balancing the capital accounts via taxing capital inflows (to offset CCP suppression of household consumption)

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wfrost @wfrost.bsky.social · 08/10/2026

(Happy to walk through the theory too if interested)

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wfrost @wfrost.bsky.social · 08/10/2026

I’ve shown you both 1 year and 5 year now, same conclusion: “no strong relationship.” To show deflation is always even usually bad, you have to develop a unique set of controls. The empirics match theory here pretty cleanly: it depends on the cause

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wfrost @wfrost.bsky.social · 08/10/2026

That’s a wild admission. I bet soda demand skews towards power drinkers, too.

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wfrost @wfrost.bsky.social · 08/10/2026

If deflation is caused by a rapid drop in NGDP, thats bad. But there the cause is a drop in demand, not deflation per se. In those limited circumstances, like the Great Depression, deflation can exacerbate / amplify the pain. But empirically, thats pretty rare

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wfrost @wfrost.bsky.social · 08/10/2026

Whats a prolonged period? The study I shared looked at 5 year periods. Again, no cause for concern

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wfrost @wfrost.bsky.social · 08/10/2026

Agree that solar panel deflation has been wonderful and mostly the result of productivity growth. However, not all of China’s exported deflation is productivity growth. Much of it is state intervention in FX and monetary policy that prevents free trade

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wfrost @wfrost.bsky.social · 08/10/2026

Cause or correlation?

wfrost @wfrost.bsky.social · 08/10/2026

Sorry denominator

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wfrost @wfrost.bsky.social · 08/10/2026

Keep in mind: deflation is good for real wages. It is the numerator after all

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wfrost @wfrost.bsky.social · 08/10/2026

Most of the growth years on that chart were good economies! Costa Rica: Last 4 years China: 1998-2002 I started with the data that shows dozens of examples of deflation and growth

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wfrost @wfrost.bsky.social · 08/10/2026

Almost all of them on that chart with growth! For example: in every Swiss deflation year on that chart (2009, 2012, 2013, 2015, 2016, 2020), real wages rose, generally by about 1 to 2.5%

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wfrost @wfrost.bsky.social · 08/10/2026

> Every case of deflation coincides with a bad economy, whether it is depressionary or not. If general prices fell in the US, we’d be in bad shape. Define bad? We’ve proven no association with GDP growth. What’s bad?

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wfrost @wfrost.bsky.social · 08/10/2026

“A broad historical look finds many more periods of deflation with reasonable growth than with depression and many more periods of depression with inflation than with deflation.”

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wfrost @wfrost.bsky.social · 08/10/2026

Which makes voters right on the econ theory, and people should stop telling them they are idiots to want lower prices

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wfrost @wfrost.bsky.social · 08/10/2026

Here’s another study that confirms exactly my point. I know it’s hard to accept. It took me a few years to stop fighting it, too. Whether deflation is good or bad depends on the cause. www.nber.org/system/files...

wfrost @wfrost.bsky.social · 08/10/2026

That’s the exact misconception! Only about 50% of the green areas are recessions. There is no relationship between deflation and recession.

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wfrost @wfrost.bsky.social · 08/10/2026

It’s less about level precision, more about the reasonable expectation that when something costs a company less money to make, then prices should decline. That’s not irrational.

wfrost @wfrost.bsky.social · 08/10/2026

That’s not true. It has only *not* worked like this in the US for about 100 years. The majority of green areas are *not* recessions - it’s a huge misconception

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wfrost @wfrost.bsky.social · 08/10/2026

By construction it hasnt happened in the US. We have made deflation impossible, and so now people (wrongly) assume that all deflation is bad. Voters are correct here on the econ theory. There is no reason to fear deflation driven by productivity or input growth.

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