A very basic explanation. Higher interest rates increase the cost of borrowing. Which in turn leads to less borrowing which in turn leads to less money inflows into the economy. Which then leads to a decrease demand for goods and services which in turn leads to decreasing price pressures on those goods and services. Probably the most times I’ve used the word “which” in any post.
Ryan Walters - OK Schools and National Embarrassment
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Loan rates affect companies too. Not buying autos works on a multiplier effect. A lot of the economy works on a multiplier effect. You have base materials, then manufactured materials, etc. Effects in one industry affects another industry, etc. Companies don't buy as many trucks to ship the consumer goods for instance. It's all tied together.
Again I will say that the best opportunity to level the playing field occurs pre birth to age 3. Before most formal schooling.
Some of the George Kaiser Foundation programs focus exactly on that period. It will be interesting to see how those interventions work out over time in that I expect there is a program evaluation component.
Some of the George Kaiser Foundation programs focus exactly on that period. It will be interesting to see how those interventions work out over time in that I expect there is a program evaluation component.
This is standard economic thinking and policy for the last 50 years at least.
Wages for lower wage workers are and have been growing at a faster rate than inflation, the people getting hurt on a net basis (wages adjusted for inflation) are higher wage workers. Look it up. Ok, you don't have to look it up, it's below. And the job loss that the Fed is pushing will disproportionately hurt lower wage workers. I think you'll follow my argument in growing real wages when you have a bit more of the facts.
Real Wage Growth at the Individual Level in 2022
Overall, 54% of workers’ nominal wage growth didn’t keep up with inflation over the past year. But young workers, low-income workers and job switchers tended to fare better than others.
I've lived in 3 of the top 12 largest US metros and it's extremely difficult, if not impossible, in all of them to get from economically disadvantaged areas to suburban areas where so many jobs are now located. Like multiple hours each way difficult.
That's because investment in transit has overwhelming worked the other way - how do we get people from the increasingly distant suburbs into downtowns and city centers. Not how do we get people from disadvantaged areas out to the suburbs. This is like school choice, we invest in transit and people in disadvantaged areas don't use it, so what can you do about them? Even though the trains, like the schools, don't serve them.
How long would it take to get from North Tulsa to somewhere random in Broken Arrow or South Tulsa? I've never taken public transit in Tulsa, maybe it's not too bad.
Historically wage growth explains more than 60% of inflation because in the US economy, the cost of labor is by far the largest cost for companies, 50% - 70% of expenses for most companies. So the most effective way to cut inflation is to cut wages, either through eliminating jobs or reducing pay. There is, for all practical purposes, no other way to reduce inflation because so much of inflation comes from wages.
Because consumer spending accounts for almost 70% of the US GDP, the way to reduce inflation is to reduce how much $$ people have to spend. Some of that comes from higher borrowing costs (both on money already borrowed and for future money) but overwhelmingly it comes from having less income b/c the vast majority of what people spend is from their pay, not from borrowing.
Say you raise interest rates and Company Y buys fewer delivery vans from Ford. Ford receives $1m less. Of that $1m, more than half would have gone to workers. So the biggest impact of reducing spending by Y is to reduce wages (assuming Ford lays people off), who then will spend less. And some other big chunk would go to suppliers, who would be paying their workers and that is lost. So of the $1m, probably 70% is reflected ultimately in reductions in wages and reductions in consumer spending. That's how you control inflation. Why do you think all the big economics shops say interest rates hang on employment numbers every month? Because that's how the Fed operates and has operated at least since the early 70s.
Corporate profits have contributed disproportionately to inflation. How should policymakers respond?
The inflation spike of 2021 and 2022 has presented real policy challenges. In order to better understand this policy debate, it is imperative to look at prices and how they are being affected. The price of just about everything in the U.S. economy can be broken down into the three main...
www.epi.org
Or look at it from the other direction. Company Z could borrow $1B for a new business project. What would it spend that $1B on? Overwhelmingly (50% - 70%) on employees, labor. So if Z can't borrow that $1B, the main effect will be reduced jobs and pay, and as G$ says, that flows backwards, so the 30% - 50% that isn't spent on workers, some is spent on parts, and the cost of those parts if 50% - 70% workers, so of the $1B that isn't spent, probably $700m works its way into the economy as reductions in wages.
If the economy worked differently and didn't require so many workers, then there would be more room to control inflation in other ways. But it doesn't.
Here, you can read to your heart's content on the Phillips Curve.
What Is the Phillips Curve (and Why Has It Flattened)?
Historically, an inverse relationship seems to have existed between unemployment and inflation. Does it still exist? And why does this matter?
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First, it takes an hour to get anywhere by bus in Tulsa. When I was a student at TU I didn't have a car so I rode the bus. It took an hour to get from TU to Woodland Hills and it involved like 4 bus transfers. It's not any better now. It's designed that way because why would people in South Tulsa want people from North Tulsa coming into their neighborhoods. Hell, the city of St. Louis for years tried to get the metro rail a north-south spur line along I-44 to go out as far as Fenton and the old Chrysler plant and another along I-255/I-270 to get to the airport. Of course this went to a county wide vote and was rejected multiple times...because people who live in South County hated the notion of people from St. Louis city coming to their suburban white enclaves and malls and restaurants. My mother in law was very vocal about city people being able to have free reign to bring their crime to south county if the metro came that way. When the intent was to get people who would work lower wages to come to the businesses (mainly the car plant) and work. And you're also right about how they're designed to get people into the city and back to their suburban home. Boston's T system was designed this way. And now in the Boston metro, there are a TON of higher paying jobs in the western suburbs all the way to Worcester but finding an outbound train that goes to the farthest T and commuter rail stops can end in a 40 minute wait for a single train. When we visited in March I looked at the commuter rail schedule to possibly take the train from my mom's house near Cape Cod into the city...a 2.5 hr trip and numerous train changes plus the cost made me conclude it would be easier to drive to Boston and pay for parking.
Sometimes you can just tell someone's a dick when you look into their eyes. Walters is certainly in this realm. He needed his backside beat all to hell when he was in high school. Obviously he still needs it.
Let me know if you blowhards have his phone number because y'all are wasting my time. I'm too busy having a beer and watching 1983 Metallica on Youtube.
Let me know if you blowhards have his phone number because y'all are wasting my time. I'm too busy having a beer and watching 1983 Metallica on Youtube.
I’m not following your numbers. A company borrows $1B to expand their manufacturing facility or build one on another state. While a portion of that $1B goes to labor for the capital project it rarely goes to payroll. Once the plant gets going a typical operation runs nowhere close to 50-70% on labor as it relates to COGS. Hell…Ford motor runs around 5%.Or look at it from the other direction. Company Z could borrow $1B for a new business project. What would it spend that $1B on? Overwhelmingly (50% - 70%) on employees, labor. So if Z can't borrow that $1B, the main effect will be reduced jobs and pay, and as G$ says, that flows backwards, so the 30% - 50% that isn't spent on workers, some is spent on parts, and the cost of those parts if 50% - 70% workers, so of the $1B that isn't spent, probably $700m works its way into the economy as reductions in wages.
If the economy worked differently and didn't require so many workers, then there would be more room to control inflation in other ways. But it doesn't.
Here, you can read to your heart's content on the Phillips Curve.
What Is the Phillips Curve (and Why Has It Flattened)?
Historically, an inverse relationship seems to have existed between unemployment and inflation. Does it still exist? And why does this matter?www.stlouisfed.org
I’m well versed on economic theory as well as the operational aspects of a business. When things get tight you absolutely reduce labor costs in the form of layoffs or slow down in hiring. Reducing the money supple obviously works its way through the system. However, high inflation hurts the poor far more than any other group. The two year decline in real wages does not receive enough attention. Reducing inflation must occur. If you guys have ways to accomplish the same other than monetary tightening please let me know.
He is awful. His ideas are generally idiotic.
Still, please send me my tax credit checks. They will come in handy.
Never taken transit from N Tulsa to BA. Closest I've come is TU area to 101st & Harvard area, around the year 2000. But I doubt it is that bad compared to similar mileage from other areas in the Tulsa metro. I'm guessing you could do it in an hour and a half.
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They're not his ideas. He clearly doesn't understand anything he is saying. He is DeVos' mouthpiece and we 100% know she supports white only schools.
Oh I wish... then oil and gas prices would have never dropped below $45/bbl and $8/MCF... massive layoff cycles would never have occurred ...
I downloaded moovit and picked a fairly long route, Harvard and Apache to Kenosha(71st) and 177th St. Taking the least walking route it took 2 hours & 45 min, with a twelve minute walk from the final stop to the destination. I know I could shave of at least a half hour maybe even an hour by taking my bike with me.(I did that for the time I was taking the bus.)
So 2 hours to 2 hours 15 min, by biking maybe 20 min to shave time off the route. I wasn't intending that long a route when I was giving my estimate.(Picking a route that is not coming from the west side of north tulsa, and going midway to the slightly longer than midway across BA) 4 hours there and back with a bit of biking is a bit rough, but do able. You are doubling the time it would take by car. It would be more like 5 hours round trip if you didn't want to, or couldn't bike to make it shorter.
Not many bus routes way out there at Kenosha and 177th. The times I looked around the Utica Square area or even around Woodland Hills Mall were much more favorable. Say 45 minutes to an hour.
He didn't specify by US companies. And don't pretend the US companies haven't held prices down in the past to try and play the long game with OPEC. Opec holds prices down often.
You're smarter than this...
30 yrs in the oilfield and I never held prices down or up..
Oil is a commodity traded the same as porkbellies, gold, wheat, and corn.. commodities traders react to supply, demand, and inflationary pressures. When inflation is high, commodities are a hedge against it and central bank monetary policy...
Somewhat true but not 100% true. We see 25% pump price increases at the hint of a natural disaster perhaps disrupting production only slightly for a few days. Perhaps the price per barrel went up in the commodities market by 2-3%. In any case the actual supply would not be disrupted to a point where there was less gas available for 6-8 weeks because of the amount of time to get the oil transported to a storage terminal and then to a refinery, then that supply getting refined, and then stored and then out to an actual station...but the price increase is almost always immediate and then takes months for it to return to its pre-event price after the supply has been restored to the level. It is so manipulated by producers and the speculators and no one checks them on that. The few times Congress mentioned it, prices dropped so fast you could only scratch your head.
Yes supply and demand are the limiters of high and low. That's the point. When Opec decides to raise the price it pulls drilling rigs, because their oil production is controlled by a unified government body. That's what comes from having government owned resources.
Opec doesnt pull rigs... they close valves.. americans cant comprehend the oilfield that the Kingdom sits on..
Yup... right up until they insulted the Kingdom in public and drove them into the BRICs alliance..
Seriously they only way congress affects the oil price is by printing money..
Have to agree. Why we were begging OPEC to increase production to combat high prices awhile back. US corporations as well as the US government have practically zero control at this point over the price of oil
Pull rigs, close valves, it all amounts to less supply/higher prices.
That was the point I was making. They have a copious enough supply to sit on oil or not depending on their desire for higher or lower prices. They either gouge the market or their competitor, whichever is more important at the time. So oil prices are not always 100% dependent on market based demand. They usually make enough money either way.
They are not alone in directing prices though. They protect market share. America is severely eating into their market share and both countries know it.
Well speak of the devil!
tulsaworld.com
Walters in Tulsa after what he calls 'assault' on religious liberty, implies threat to school district accreditation
State Superintendent Ryan Walters staged a press conference Friday on the grounds of Tulsa Public Schools’ administration building about an incident he views as a violation of a local school board member’s religious freedom. #oklaed
Why do these people's assholes get so wound up with just one or a perceived incident? Why is this guy so obsessed with Tulsa Public?
I was a 9-year Catholic school kid and showed up on the Northside. On the first day, people were praying at the flag pole. No one cared. That took me aback since I was told before there was no religion in schools by my Catholic indoctrinators. Public schools were the devil. There were Christian organizations at the school. Hell, they taught "bible as lit" I quickly realized there was no forced religion in schools, so we good.
Why are these people's assholes wound up with just one or a perceived incident?
I was a 9-year Catholic school kid and showed up on the Northside. On the first day, people were praying at the flag pole. No one cared. That took me aback since I was told before there was no religion in schools by my Catholic indoctrinators. Public schools were the devil. There were Christian organizations at the school. Hell, they taught "bible as lit" I quickly realized there was no forced religion in schools, so we good.
Why are these people's assholes wound up with just one or a perceived incident?
It is a real shame that Walters is distracting everyone with these silly issues.
There are real problems with TPS that get overshadowed by these political statements. My wife was doing a summer school maker space workshop at Central yesterday and it was a horrendous, undisciplined free-for-all complete unsuited for education. We have real problems requiring attention. The issues Walters is bringing up are irrelevant in context.
There are real problems with TPS that get overshadowed by these political statements. My wife was doing a summer school maker space workshop at Central yesterday and it was a horrendous, undisciplined free-for-all complete unsuited for education. We have real problems requiring attention. The issues Walters is bringing up are irrelevant in context.
Walters is a straight douche and he will get his ass kicked for it. Just like he should've gotten his ass kicked when he was a straight douche at 15-years-old. Once he and his butt-buddy Nathan Dahm get punched in the face a few times, they'll shut the F up. It's really is simple as that.
He thinks he's an outlaw cuz his hometown is adjacent to Wilburton.
