Rising Prices Are Bad, but Plummeting Prices Are Worse
Rising Prices Are Bad, but Plummeting Prices Are Worse
The article discusses how plummeting prices and deflation in China, a result of excess supply and low demand, pose a significant threat to its economy. While Americans might envy cheaper goods, this deflation discourages consumption and growth. Chinese leaders are attempting to manage the problem through market interference rather than fundamental economic reforms, leading to a potential long-term deflationary spiral similar to Japan's 'lost decades.' Despite the challenges for China, its export of lower prices could benefit other countries, though tariffs might offset these savings for nations like the US.
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it's a good reminder for all the pros of the market in china it carries hefty challenges as well.
the opposite of affordability is real and striving for lower or higher prices are just symptoms. what we want is a healthy society. what constitutes that is its own challenge!
i do think the call to have politicians stay out of the market misses too much nuance. the markets aren't perfect, international trade politics sometimes justifies intervention and end game capitalism isn't looking good for anyone right now.
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