Alp Dener
@alpdener.bsky.social
Senior Performance Engineer @NVIDIA | HPC + Optimization + AI/ML | Immigrant 🇹🇷 → 🇺🇸
The ratio has been ticking up for households earning more than $50k/yr.
US median income is $74k as of 2022.
Meanwhile, we're staring at a chart of *averages* that obscures this reality.
And now we have an excellent simplified example of the economic modeling issue I've been talking about.
US median income is $74k as of 2022.
Meanwhile, we're staring at a chart of *averages* that obscures this reality.
And now we have an excellent simplified example of the economic modeling issue I've been talking about.
November 14, 2023 at 3:10 PM
The ratio has been ticking up for households earning more than $50k/yr.
US median income is $74k as of 2022.
Meanwhile, we're staring at a chart of *averages* that obscures this reality.
And now we have an excellent simplified example of the economic modeling issue I've been talking about.
US median income is $74k as of 2022.
Meanwhile, we're staring at a chart of *averages* that obscures this reality.
And now we have an excellent simplified example of the economic modeling issue I've been talking about.
What if you compare the debt levels to amount of disposable income *by income level*?
www.federalreserve.gov/econres/scf/...
www.federalreserve.gov/econres/scf/...
November 14, 2023 at 3:04 PM
What if you compare the debt levels to amount of disposable income *by income level*?
www.federalreserve.gov/econres/scf/...
www.federalreserve.gov/econres/scf/...
The inflation discussion has lost sight of this core truth now, and we run the risk of rate hikes that take more away from people's budgets than what they gain from slower inflation. And then we have the audacity to tell them that their everyday financial struggles are not real because "data".
November 14, 2023 at 2:48 PM
The inflation discussion has lost sight of this core truth now, and we run the risk of rate hikes that take more away from people's budgets than what they gain from slower inflation. And then we have the audacity to tell them that their everyday financial struggles are not real because "data".
That's not to argue that we shouldn't have raised interest rates, but to make a broader point that the economy exists to serve society. Slowing inflation cannot be a goal by itself, nor can it be a metric of success. It is simply a method of improving financial security and quality of life.
November 14, 2023 at 2:39 PM
That's not to argue that we shouldn't have raised interest rates, but to make a broader point that the economy exists to serve society. Slowing inflation cannot be a goal by itself, nor can it be a metric of success. It is simply a method of improving financial security and quality of life.
And therein lies the problem. The monetary policy of aggressive rate hikes is recommended by economic models that are agnostic to which group of people it hurts the most. The people who create and administer these models are absorbed into the numbers and have lost sight of the *social* outcomes.
November 14, 2023 at 5:54 AM
And therein lies the problem. The monetary policy of aggressive rate hikes is recommended by economic models that are agnostic to which group of people it hurts the most. The people who create and administer these models are absorbed into the numbers and have lost sight of the *social* outcomes.
The problem is that we also have record high unsecured debt (e.g. credit cards) levels right now, and unsecured debt is affected far more severely by rate hikes than secured debt like mortgages and car loans. All these people see their monthly budgets squeezed hard by a spike in interest charges.
November 14, 2023 at 5:40 AM
The problem is that we also have record high unsecured debt (e.g. credit cards) levels right now, and unsecured debt is affected far more severely by rate hikes than secured debt like mortgages and car loans. All these people see their monthly budgets squeezed hard by a spike in interest charges.
Inflation is a good example. We track it as an indicator of spending power, and then we take policy action to reduce inflation so that people have more disposable income. We raise interest rates.
November 14, 2023 at 5:31 AM
Inflation is a good example. We track it as an indicator of spending power, and then we take policy action to reduce inflation so that people have more disposable income. We raise interest rates.
It’s more like…
Economist: The comically simple models we’ve invented to approximate the behavior of an extremely complex system say that the macroeconomic metrics that we arbitrarily assume to be correlated with subjective things like security, fulfillment and happiness are trending positive.
Economist: The comically simple models we’ve invented to approximate the behavior of an extremely complex system say that the macroeconomic metrics that we arbitrarily assume to be correlated with subjective things like security, fulfillment and happiness are trending positive.
November 14, 2023 at 5:15 AM
It’s more like…
Economist: The comically simple models we’ve invented to approximate the behavior of an extremely complex system say that the macroeconomic metrics that we arbitrarily assume to be correlated with subjective things like security, fulfillment and happiness are trending positive.
Economist: The comically simple models we’ve invented to approximate the behavior of an extremely complex system say that the macroeconomic metrics that we arbitrarily assume to be correlated with subjective things like security, fulfillment and happiness are trending positive.