[quote=spdrun]As a deflationista, shouldn’t you be against higher wages and for lower prices? i.e. more of an “end the Fed” sort of gal?[/quote]
I’m both a deflationista AND a labor advocate (and pro-family, and pro-middle-class). Ideally, I’d like to see the shrinking of the labor force (more parents having the option to stay home if prices are falling/wages are stickier; more people living in multi-generational housing…in a good way), rising/sticky wages, and lower prices. Overall, a better quality of life for the average person. Not saying that would be the immediate effect, as deflation is indeed damaging; but at some point, deflation stops, and I think that a greater number of people have a better chance of achieving success (happiness, higher quality of life) in a deflationary environment than an inflationary one. Depends on the details of the events, but that’s a general belief.
It’s purchasing power that I care about most, and deflation is necessary to bring some kind of balance back between labor and capital. Inflation (of asset prices) greatly benefits capital at the expense of workers.
Just to be clear: the effects of inflation (increased money supply) can take many forms. Inflation can affect one sector or group more than others. You can have massive inflation, but also have falling wages (yes, even nominally). That’s what we’ve been experiencing since the “Great Recession.”
