quote:
You said raising wages would cause inflation. Then you said "your wage growth you want for China is a lagging indicator of inflation". You can't decide if you want to be it to be leading or lagging.

In the US, stimulus packages came first causing inflation, the market responded by having to raise wages to convince people to work.

In your socialist dream, wages get boosted with out a corresponding increase in productivity.
That's inflationary.

You tried to use a post inflation US wage raise that did not outpace inflation to justify a pre inflation wage raise across a nation losing market share.

quote:
I tried to summarize your position above

No you didn't you tried to create a strawman to justify your recycled socialism.

quote:
but now it sounds more like, "it can be done, but not by payer higher wages".

Cannot be done quickly, end quote.

It's never been doable quickly.

The closest would be when industrialization massively decreased prices while increasing wages.

But that shook the foundations of social order.

Also when the US left the gold standard and the great depression there was a significant amount of pent up productivity that coupled with massive federal stimulus of WW2 lead to long term increases in buying power

That collapsed into stagflation.

It didn't rise again until new industries in tech formed out of Silicon Valley.

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Posted by wdhalgren

Member since May 2013

5331 posts

Posted on 4/19/25 at 2:53 pm to Narax

quote:
You tried to use a post inflation US wage raise that did not outpace inflation to justify a pre inflation wage raise across a nation losing market share.

I said it didn't cause runaway inflation here and it wouldn't there. If anything, the post covid US wage inflation was more likely to cause runaway inflation than raising wages would be in China. We were more likely to get a wage price spiral, still may happen.

quote:
Cannot be done quickly, end quote. It's never been doable quickly.

Thanks, we're getting closer. I said raise wages, didn't say do it quickly. You responded with "So runaway inflation". Now we're up to "it's doable, but not quickly".

Then you went from, "they know they can't continue absorbing the loss of US trade domestically." to this, "Everyone agrees that China wants to gradually move to a consumer/services market." I had to actually give you their plan (circa one month ago) in writing to get that concession, but that's okay. My plan, the one you called Zimbabwe, actually is their stated plan. Other than shrink the economy by 5% (most govts won't accept that) it's about their only other good option.

After WWII, we took that pent up production and turned it to our own purposes, just like China's about to do as their trade surplus begins to decline. Wages spiked, consumption rose rapidly, but inflation did not runaway because we had excess industrial capacity to meet the demand. The middle class grew larger. It's doable.

This post was edited on 4/19/25 at 3:30 pm

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Posted by Narax

Member since Jan 2023

7971 posts

Posted on 4/19/25 at 4:13 pm to wdhalgren

quote:
I said raise wages, didn't say do it quickly.

You said 2 years.

in 1946, inflation was 14%

From 1946-1951 we had 4 (of 6) years over 7.5% inflation.

47% cumulative inflation from 1945-1952.

After that it stabilized.

It's not feasible in 2 years without runaway inflation.

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