This site has recently carried two stories: one about inflation, and one about driving test delays. Of course, they are in fact manifestations of the same problem – the destructive insanity of blanket lockdowns (except in Downing Street) resulting from the Government abrogating responsibility for decisions about dealing with the pandemic by listening only to a narrow group of well-paid and insulated epidemiologists and modellers fixated by one issue.
On February 19th 2021 I drafted an article about inflation for this site that I spiked, something I now regret. I thought I was being too pessimistic (instead I made a passing allusion to it here). This is how I concluded the spiked piece – nearly 16 months ago:
There is much talk on this site about how the Government cannot continue to rely on mitigation measures like lockdowns and restricting movement. Printing and borrowing money is something else that cannot go on at the present rates either. You’ll note that the Government says as little as possible about this, but you can be absolutely certain that behind closed doors a great deal is being said.
It’s worth bearing in mind that the politicians driving us down this route are unlikely ever to weather the consequences professionally. Many will have left Parliament within five to 10 years and very few will be left in 20 years, but the consequences of crippling an economy and bankrolling it by printing money will last for a very long time, saddling their successors and everyone else with the fallout. It’s also quite likely that more than a few of the lockdown zealot scientists have little understanding of the financial consequences of the policy beyond an awareness of individual hardships (from which they are of course personally exempt).
Funnily enough, I hadn’t foreseen the Ukraine War, and nor did I anticipate how the drive to push many jobs into working from home would become apparently permanent and make a bad situation even worse than it was already going to be.
Unfortunately for all of us, from early 2020 on far too much power and influence were allocated to one type of ‘expert’. However well-intentioned their input might or might not have been, their expertise was very limited. Most lacked either the general knowledge or three-dimensional minds to understand that whatever problem they were trying to solve, their solutions might make it far worse because of consequences they did not understand. Nor did they seem inclined to consider anyone else’e views.
In my view, the more focused and narrow their professional spheres, the more likely they were not to understand the damage they might cause in other areas if they were over-listened to.
And that become immeasurably worse once lockdowns were turned into a way of life, egged on by a cabal of scientists and aided and abetted by the Government.
It’s almost exactly a century since the hyperinflation that destroyed the economy of Weimar Germany in 1923. The French invasion of the Rhineland in January 1923 to seize funds for the reparations due under the Treaty of Versailles wrecked German industrial output. The Weimar Government’s solution was to print money, and in those days that meant literally print money.
Within a few weeks the currency had collapsed. We’ve all seen the pictures of people pushing wheelbarrows full of money to pay for a loaf of bread. Only when the Americans stepped in with the Dawes Plan to bankroll a new currency with loans was the disaster headed off; but even then it only bought time – the 1929 crash led to the American loans being called in, and Germany’s economy not only collapsed but this time a large number of ordinary Germans were inclined to listen to the extremist policies of the Nazis to dig the country out of the hole.
It is stunningly easy to understand how inflation happens at a basic level. If there was such a book, it would be a chapter in the Noddy in Toyland Guide to Economics. There is no such book, so I will explain.
The inflation equation works like this: m×v = p×q where:
- m is the supply of money in the economy, literally the amount of money available to go around. In the old days you had to print it. Nowadays you can just type it into an electronic balance sheet. Hey presto!
- v is the rate at which each unit of money is used in transactions. Put simply, this means a £5 note can sit in a drawer all day or it can take part in one or multiple transactions in a single day.
- p is prices.
- q is the quantity of goods and services in the economy.
Obviously, this is a very simple way of looking at it. But the principle is unaffected.
The equation is never balanced. It is always trying to balance, and the result is that some inflation is almost inevitable, and even normal. But it can go very wrong very easily, which is why the last person you would hire to advise you how to run a country in a pandemic is an epidemiologist or anyone associated with either epidemiology or modelling.
It’s absolutely fine to increase the supply of money if the quantity of goods and services in your economy has increased too. Indeed, you have to do so in order to make it possible to buy and sell those extra goods and services. It all goes hideously wrong if you start increasing the money supply when the goods and services haven’t increased or even worse when they’ve actually diminished.
Sound familiar? Got it in one. In 2020, the British Government, like many other governments, enacted a whole series of measures that started reducing the availability of goods and services and then started printing money (‘quantitative easing’) to compensate for the goods and services that weren’t being made. That meant more money standing for less in the way of goods and services. And it wasn’t alone – all over the world other governments dived headfirst into the abyss. We are nowhere near 1923, but we have certainly started down that road.
The equation demonstrates easily what happens next. Since m (money) has gone up and q (goods) have gone down then prices (p) must rise to balance m. Result: accelerating inflation, caused by more money chasing fewer goods. By increasing demand at a time of declining supply, the automatic response is for prices to rise until demand is reduced enough to balance supply.
And what happens when inflation takes off? People see their money diminishing in value so they are encouraged to spend it before they can’t afford what they want or need to buy. Result? v starts going up: people try to shift their money more quickly.
And since q (goods) aren’t going up, then p (prices) go up even more.
The real catch is that governments which have overspent love inflation. It wipes out their debts and encourages people to blow their savings. So, don’t think for one minute that Rishi Sunak and his henchmen aren’t secretly helped by inflation. This is how they’ll bankroll the lunacy of 2020.
And what about driving tests? Here’s the rub. Civil servants are by definition unproductive – they don’t usually make things or perform services that drive the economy. But they do service taxation which redistributes money in the economy in a very wide range of different ways. This includes funding defence, food standards, policing, hospitals, and schools – the people who work in those jobs earn money and spend it.
But the civil service isn’t always fulfilling its remit. Driving tests are a metaphor for making the inflation equation worse. By making it difficult or impossible for thousands of people to book driving tests, the civil service is making it harder for those people to become economically productive. That further diminishes the availability of q (goods) in the economy. Every other civil service delay in untold different contexts further inhibits economic activity. People without passports can’t buy air tickets, for example.
These examples are just small parts of a whole vast teetering and self-inflicted catastrophe. And the Ukraine War? Putin might have made a terrible misjudgement, but you can be sure that one of the reasons he went ahead was that he must have spotted a beleaguered and badly damaged West that would be far less able to withstand the economic fallout of his invasion. We have yet to see how the West might splinter when national self-interest takes centre stage.
Is there a reason to be optimistic? Only in the sense that I don’t think we’ll see 1970s levels of wage rises driven by unions chasing inflation, and I hope we don’t see an economic collapse that will lead to the rise of extremist politics. But we’re in a tight corner and both are technically possible. And there really isn’t any doubt about who’s to blame, and it should have been screamingly obvious to them from the day they locked us all up in our homes.
The supreme irony is that the economic fallout ultimately has the power to ruin the lives of those who were most susceptible to the effects of Covid. That’s not least because the NHS depends on an economy that can fund the astronomical quantity of staff and resources needed.
The big question is: did they have a choice? That’s another debate, but one thing is certain: the day U.K. and other governments started shutting their economies down they set in motion a train of events that has contributed directly to the parlous state we are in now, while the scientists who were so oblivious to the possibility of this outcome have disappeared like rats up drainpipes. Incredibly, there are still some keen to wheel out lockdowns again at the drop of a hat.
Every one of us will be paying for this in some way for the rest of our lives, from the elderly who see their savings destroyed to the young who will be unable to afford the luxury of saving anything at all.
I’ll end with a reminder of what the Imperial College team said back in their report of March 16th 2020 when they recommended “epidemic suppression” (lockdowns): “The social and economic effects of the measures which are needed to achieve this policy goal will be profound.”
At least they got that right, but it will surely go down in history as one of the greatest understatements of all time.
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More subtly, it was specific citizens that benefited from an increase in m, whilst others suffered a decrease in m and an increase in p
In other words, the Government stole wealth from the self-employed and small businesses to cover its debt and keep the baying peasants on-side
Totally true! I started a small business in 2019 whilst still working and It was going so well that I quit my job in Jan 2020. My yearly takings went from 30k in 2019 , to 30k in 2020, 12k in 2021 and £362 in 2022. Part shortages, that still haven’t been resolved, and inflation of upto 500% on some components totally killed it. Because I was working paye in 2019 and earned £500 more than my self employed income I was not entitled to anything. Then if that wasn’t bad enough my late fathers house was being let out to tenants, who didn’t pay any rent during the pandemic, which has been an f’ing nightmare. Oh and any interest on my savings was also reduced to 0.
At least if you get mugged in the street you have a chance to fight back
At least if you get mugged in the street you have a chance to fight back.
That’s not the opinion of the police. The only thing you may legally do when getting mugged in the street is call the police afterwards (which will then likely ignore it). Otherwise, you’re committing a crime.
NB: I actually got mugged in the street that’s what the police repeatedly told me. They also let the guy who did it go free using a cooked-up pretext.
You are perfectly entitled to defend yourself ‘with reasonable force’.
My definition of that is, providing I end up sitting on the mugger whilst I call, and wait for the police to arrive, anything I do to achieve that objective is reasonable force.
I am morally duty bound to ensure the mugger isn’t allowed to escape and subject anyone else to his brutality.
As the Murkan phrase has it:
“When seconds count, the Police are only minutes away”
They can’t be everywhere or you would be complaining of living in a police state.
But they do need to be somewhere.
Or in the case of Texas- just outside but “hours away”.
when seconds count, the plod are idling hours away.
The good question is What precisely constitutes reasonable force? In my case, the guy slammed me into the door (slightly bruised shoulder) and threatened to knife me while trying to get his hand into my pockets which I stopped by putting mine in first. We then stood there in this silly embrace until I decided that this couldn’t possibly go on any longer and consequently, slammed him into the door as well (I hope it hurt as well). Unfortunately, in order to do this, I had to take my hands out of the pockets so, he could pull out my purse. He then got the £30 out of it and ran away. In hindsight, I should have kicked him, maybe against the shin. With a 2kg military boot, this ought to make an impression
. But would this be considered reasonable?
If you are threatened with a knife, it’s arguable that virtually anything goes, assuming he produced the knife.
If a woman is being raped, one of the critical components of her defence is that she fought with as much force as she could against the act.
Complicated of course, do you fight a man with a knife at your throat and risk death or do you surrender to the rape?
Lot’s of possibilities with the term “reasonable force” however, I have been live on the Jeremy Vine show (many years ago when I listened to it) and told a Chief Constable who was debating the issue that, as far as I was concerned, reasonable force included the force necessary to ensure an assailant would never repeat an act against me in their life. In other words, they would be terrified to do so.
He blurted out the usual drivel that I do something like that at my own risk however, I’m happy to stand in court and defend my actions on that basis.
The fact is, I have defended myself in this manner on a couple of occasions. When the police arrived at one and recoiled at the state of the assailants face they threatened to arrest me. I told them in no uncertain terms they were on a hiding to nothing, and explained why. They backed off pronto as I was the victim, it just looked like the other guy was.
I’m an ex cop, but they didn’t know that.
Nearly got mugged once till i i whipped out me grandads old jack
Assuming you are a woman, if that ever looks like happening again, just let rip and get your talons out. Scratch and bite, knee the guy in the balls. If he has hair, grab it as it’s a great control mechanism, the body invariably follows the head.
Never mind your purse, inflict as much damage as you possibly can.
Poke his eyes with anything you have, including your fingers. Spit scream and target the soft parts like his throat, ears, nose (a head-but is fantastic and unexpected at close quarters) and yes, his shins as well, and stamping on his feet.
The best response from a woman is to go completely berserk. The assailant will usually run off.
Assuming you are a woman,
No, I’m not.
Didn’t work out too well for the copper that sat on George Floyd
The Police will provide virtual tea commiseration and sympathy from a Trained Officer via a phone call ( if anyone is available)
“I quit my job in Jan 2020″
That was pretty unlucky timing! Good to see you seem to have weathered it.
The goal was decided amongst the Western governments. Accelerate the deficit spending to create debt furled inflation and economic pain. Do it at the same time and you won’t notice the currency effects.
meanwhile please can everyone sign this petition to hold a public investigation into vaccine safety.
we need about 13,000 more signatures
https://petition.parliament.uk/petitions/602171
URGENT 6 DAYS LEFT
Yes. Thieving government scum.
Yes, but think Globally – this is all so much bigger than Johnson – who is after all “only obeying orders”. ( Gates was a celebrity guest in Downing Street just weeks before Lockdown was declared).
They really don’t want self-employed and small businesses. Independence is not a characteristic they are keen to encourage.
That is so very true sadly. The just want obedient sheep
True story. Near the start of the pandemic I bumped into an old mate in Lidl. He runs a small chain of barbers. I said it must be hard for him with all his shops closed. He replied that he’d never been so rich. He’d just bought a new car, was getting the house extended, paid off debts etc. The government were throwing money at him with very few questions asked. It was obvious to me then that trouble was coming down the line. If economies could function by printing money to pay people to do nothing, they’d all be doing it right?
I mean, fuck me, what will it take for people to realise how screwed we are? Seriously.
Agree. A friend of mine owns a business employing about 35 employees. He told me that the government gave him £60k for free, no questions asked if they required it, no pay back, just £60k in his back pocket. The best thing he’s a honest person, just think what the dishonest will be getting.
My mum runs a shop. It’s pretty much a hobby. They called and called and offered her money. She eventually took £10k and gave it to my sister to pay the school fees (as she didn’t get anything, being a freelance gym instructor – no furlough, no help, nothing).
Yes, a friend of mine had a similar story – money was scattered without any real checks where it was going and why. He was told he should be cashing in!
Will it take the realisation that the average taxpayer will have to stump up around £20000 to pay for the government’s futile Covid largesse. That’s the bill that’s already in, but additional knock on costs of Covid will continue to pile up for years to come.
When you add it all up, along with every other action of this Government – with the full support of the “Opposition” (sic) of course- , it amounts to a total take-down of our economy and society on every front – people had better wake up before the real crisis they are building for us hits!
With the current planned “On Line Harms” legislation it also seems all opposition and criticism will be made illegal. by Nadine Dorries.
This site will surely not survive. I do hope that Toby is ready.
My wife and I ran a business together. Because it was not earning much I had to draw down from my not large personal pension which meant I did not qualify for funding: no problem for me. My wife was not drawing down pension at that tine 2019-20? so she was offered funds.
There must have been a scam at HMRC because the money went to a Co-op Bank account we have never had any dealing with. Despite probviding all details HMRC did not want to know, Co-oP Bank did not want to know and nor did the bank regulator.
No scam would have netted just one small payment; there must have been a lot of money taken.
I was horrified to hear my hairdresser admit to having benefitted the tune of £57k due to Boris’s lockdown largesse!!
I have a friend who runs a pub in a very small village; it’s basically a hobby pub which he keeps going for personal reasons. I popped in after the first lockdown and asked him how things were going and he said he’d “made” more money in the previous 6 months than in the previous few years. Because his was the only business in the village, he’d benefited from a sizeable payout from the Government since the available money hadn’t had to be divided between any other businesses.
The Government’s lunacy was off the scale.
“Lunacy” or basically knowing their mates will be ultimately where that surplus spend will end up and who’ll be on the hook for it (not their mates).
Friend of mine has a rental property in the Lakes. “You must have really suffered during the last 2 years, no?”, I asked. “Not really,” he replied. “We got £35K for nothing and our bookings were actually up”.
Multiply this experience by 1000’s…
But, but, but it’s all Putins fault. The government (joke of) printing money and giving it away for free to all comers didn’t have any affect on inflation, but Putins couple of months in Ukraine is the reason.
We know this is a lie.
or as Einstein put it some time ago
E = mc^2
E = cash in (E)xistence
m = Number of (M)utton headed wokes in the UK
c = Lunacy of Jug-Eared (C)unt in number 11 on a scale of 1-100
It was an attempt to destroy society and the economy – all power to the nations who opposed the WHO international health regulations while our government lied about sovereignty.
https://twitter.com/SteveBakerHW/status/1526112285512572928
https://petition.parliament.uk/petitions/614335
https://www.onenation.org.au/who-forced-into-humiliating-backdown
Gov.uk email to petitioners:
“The Government has responded to the petition you signed – “Do not sign any WHO Pandemic Treaty unless it is approved via public referendum”.
Blah, blah, blah. So much for Taking Back Control.
That trite phrase was complete bollocks when the Covidians were spouting it back in March 2020, and unsurprisingly it’s still complete bollocks now!
It’s also just a reuse of the Brexit negotations chestnut Nothing is agreed until everything is agreed, presumably, because it’s coming from the same people.
Remainiacs and covid-hypochondiracs have a huge overlap.
Strangely enough, they not only misjudged the mood of the public, they misjudged the mood of much of the rest of the world and got it wrong, again!
In the end the “mood of the world” counts for nothing against the vast fortunes and Global power centres ranged against it.
It presupposes that the only and best way to protect the nation from infectious disease is to hand over dictatorial powers to an outside organisation, and this is not at all obvious when you look at that organisation headed by a non-medic, with a disreputable history and backers like BMGF (which proposers creating its own body storm troopers to supply the WEF). Meanwhile, look at all the wealth of internal medical advice the government chose to ignore during the last two years. Nor do we see why the government has the authority to do this anyway (which is perhaps the most important thing). Why does that oaf Johnson think he can over-ride our rights in British or international law?
Boris is Blair v2.
When will people wake up to the fact that the occupants of the H of C have declared WAR on the people of this country?
Bozo and his Cabinet members have committed and are continuing to commit serial acts of treason the like of which the greatest writers of fiction would not even contemplate.
Excellent comment!
We need a ‘Wakey Wakey’ call – even for so many on here!
It gets more urgent by the day as their plan openly develops around us all!
Then we must realise that Johnson like Biden, Trudeau, Macron, Rutte, Scholz and Ardern is merely “obeying orders from above” under the malevolent gaze of Schwab and the power grabbing Gates/Tedros WHO(currently re-grouping for another assaut on our medical freedom)
I have just posted about Steve Baker.
About the only MP in the entire HoC who I trust.
Chope?
What does Chope have to do with it? Other than being a Eurosceptic and a climate sceptic like Baker.
He’s the only one pushing for compensation for vaccine injuries and is having a thin time of it, not least from the disgraceful Hoyle.
I wish he was a bit younger because his campaign could take a very long time. He’s got integrity.
So where is the United Front Cross Party Opposition to Johnson and Starmer?
Baker ‘speaks out’ once every three months.
“Was”? They are still working on it!
I expect the African nations who opposed the WHO Treaty just see an opportunity to increase the level of “financial aid” they’ll get ….. providing they change their minds.
Seems inescapable that if availability of fundamentals such as gas, wheat and microprocessors remains constricted, inflation is going to run and run. Slippery times.
All just part of the plan.
Has Johnson been preparing a secret Riot Police Squad I wonder? Are tasers for Specials just the start?
“But it can go very wrong very easily, which is why the last person you would hire to advise you how to run a country in a pandemic is an epidemiologist or anyone associated with either epidemiology or modelling.“
More generally, the last person you should allow to run your country, or whose advice on running it should be followed uncritically, is any kind of expert in the current thing.
Politicians are supposed to be able to balance the advice and demands of all the various experts in all the various areas of expertise, and find the optimal, or the least worst, policies for the country as a whole.
In this lies the specific failure of our entire political class over covid (and other matters). This is not personal to Johnson, or partisan for the “Conservative” Party. In almost every regard, the available alternatives to either would have been as bad or, in the case of the Labour Party, far worse.
We face not the failure of a particular leader, or a particular political party, but a systemic failure of our entire political class, and most of our political social, academic and cultural elites, generally.
And that should be a clue that when the same people, by and large, enter into another similar hysterically obsessive panic to covid, BLM and climate alarmism, as they have done over the Ukraine, there’s a very good chance they are just as wrong.
And indeed, they are.
A historical fact I’ve occasionally been pondering is that the raise of the (somewhat nominal) political power of the house of commons parallells the decline of the empire.
Be interested to see your development of that thesis.
Funnily enough I was just reminded of Corelli Barnett’s view, quoted in the intro to a book in Larry Johnson’s blog yesterday:
“There is no denial that the United States and its people form a truly great nation. It is a powerful nation, a superpower with a short but bright history. American entrepreneurship and technological genius still continue to amaze the world. But there is a real downside to it; a real rot which becomes more evident with each passing day. It has happened before and if any historical parallels are to be drawn—a process which must be done in the most cautious and educated manner—one example of a dramatic change in historic fortunes comes to mind: the British Empire. English military historian Corelli Barnett, who experienced and documented Great Britain’s final departure from her superpowerdom, made one of the most relevant scholarly observations on the fundamental causes:
INTRODUCTION–AMERICA’S DANGEROUS NARCISSISM
The book:
Losing Military Supremacy
by Andrei Martyanov
The problems with Mercantilism are fairly obvious. For a start, imposing high taxation on imported goods encourages other countries to do the same, or worse, boycott or even ban your products.
It became impossible to ban colonies from trading with other countries. Can you imagine Australia or Canada conforming to a diktat from Westminster that they are not allowed to trade with other nations?
“Government helps home industry grow”. Arguably what they try to do however unions invariably get in the way. The mistake we made was to imagine the nationalised businesses could be managed by the government to perform better than independent ones. (not as straightforward as that, I know, but money was pumped into them to ensure success, then they failed).
So many other examples, just from this single illustration, can be used to demonstrate that Mercantilism failed because the world moved on.
I don’t think many people these days would argue for a general policy of outright mercantilism. But nor would most sensible people argue for unlimited free trade, imo. (I know some would, but I regard it as an inherently not sensible position, even where you can trust the other side to abide by rules and agreements, let alone in the real world.)
Outright free trade couldn’t possibly be any worse than what we have had since Blair.
‘Mercantilism’ was useful while it lasted, especially for projecting Europe around the world – I suppose the same could be said of Liberal Democracy.
Mercantilism is an ancient economic fallacy, it is, more fundamentally, a metaphysical fallacy where everything is the exact opposite of what it is.
What an excellent comment and valuable references ! We might even get a serious grown-up debate going on here at this rate!
My interest in US domestic politics continues to be 0. Whoever governs the USA isn’t going to restore Germany to actual independence. End of story.
As to the issue I mentioned, the original purpose of parliament was to keep the power of the executive in check, mainly by limiting the amount of money it could spend. As soon as parliament had usurped the executive, the latter basically ceased to function. The prominent example of this would be the end of British rule in India. This didn’t happen because the Ghandi-uprising was oh-so-much promising but because, with WW2 over and the world reordered to maintain the status quo in Europe in perpetuity, the Attlee government was driven by the singular goal of cutting costs, ie, get rid of all this useless military. This obviously included the Indian army. The reasoning went somewhat For as long as the Indian army remains loyal, we can continue to rule India. At the moment, it is, but this might not be the case in future. Pulling this down to earth yields the rather more trivial At the moment, our Indian mercenaries are willing to fight for us because we pay them for this. But we don’t want to pay them.
The ideal parliamentary government would spend money on exactly nothing except an ever growing civil service (including NHS management and outsourcing companies competing for government contracts by trying to cut the cost of providing an actual service to their involuntary customers more radically). In peaceful times, this system is just dysfunctional and wastes tons of money on all kind of mutually sabotaging hobby-horses without ever really getting anywhere. In non-peaceful times, as during the Corona panicdemic, it immediately absolves itself from responsibilty for anything by handing near-absolute power to the first set of tinpot dictators who promise to be able to get rid of the supposed problem. In either case, the people are f***ed.
In this lies the specific failure of our entire political class over covid (and other matters). This is not personal to Johnson, or partisan for the “Conservative” Party. In almost every regard, the available alternatives to either would have been as bad or, in the case of the Labour Party, far worse.
Which is why this party and these alternatives should be unelectable for a generation. And what did we get? An 8% (or so) increase for independent candidates in the local elections, and decreases in Scotland and Wales. We have a long way to go.
The trouble with the naive quantity of money equation is that it fails to take account of money that is saved and not spent.
If you have any money in your wallet or any credit balance at a bank that you haven’t spent the instant you got it then you have disproved the central thesis of this article.
The problems we are having have nothing to do with quantity of money or turnover as the GDP figures attest. MV being Turnover or GDP to its friends. It should have gone sky high and it hasn’t.
The problem is that we threw sand in the wheels with lockdown which crippled the supply side, and then we’ve had a shift in the terms of trade of energy due to supply constraints and a war.
But lets not talk about difficult systemic issues. Lets believe Monetarist fairy stories that were disproved in the 1970s and send the economy into an even bigger tailspin.
Goverment always spends by issuing new money and that always generates the tax and savings that matches it. And has done for at least 150 years – amazingly with no hyperinflation in sight
A new working paper that explains precisely how it works in reality
https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis
The trouble with the naive quantity of money equation is that it fails to take account of money that is saved and not spent.
If you have any money in your wallet or any credit balance at a bank that you haven’t spent the instant you got it then you have disproved the central thesis of this article.
The v variable defined in the article accounts for that. It also mentioned that government acted to suppress economic activity generating actually valuable goods/ services, ie, what you mention in your threw sand in the wheels sentence. This would have caused price rises
on its own. Additionally dishing out newly invented money as payment for economic inactivity(!) made things even worse.
Exactly. If prices went up that’s one thing but to them hand out free money to buy this overpriced stuff regardless is madness.
There is method in it!
“The v variable defined in the article accounts for that.”
It doesn’t does it. There was an awful lot of M issued, and the fact that you can see it tells you that the ‘v’ is zero – ie it is saved. Because otherwise it would have disappeared in tax and the ‘m’ wouldn’t exist any more.
Money isn’t gold coins. It is created and destroyed every day in vast quantities.
It is the suppression of activity that has damaged the system. The government creates money all the time and it doesn’t cause inflation.
This is nonsense. No factor of a product can be zero without the product also being zero. V is the rate at which money is being spent. For the sake of a simple example, assume someone’s making £10 per day and always spends £5 and saves the other £5. This means for the first day, v is 1/2 because 10 x 1/2 = 5. On the next day, there will be £5 of savings from the day before, another £5 spent and another £5 saved. v is this 1/3 because 15 x 1/3 = 5. On the day after that, it’ll be 1/5 because 25 x 1/5 = 5. And so on. For as long as savings are increasing while spending isn’t, the spending rate continues to fall.
This isn’t exactly rocket science, more elementary school mathematics. I admit I’m surprised that there are people with wild theories out there who even dispute multiplication. But this doesn’t make me feel inclined to pay attention to their theories as I really didn’t learn anything in school (beyond what I short-term memorized to pass the tests) isn’t a positive qualification.
The trouble with MMT fools and their communist friends is that while they correctly point out that the government cannot technically run out of its own currency, they somehow fail to notice the real economic consequences of reckless spending and instead assume “oh, go on, there is no reason to worry at all”.
But the consequence of MMT-fueled money creation bonanzas is malinvestment – essentially removing economic power from all better informed parties in favor of directing real resources to idiot endeavors pursued by the less informed government – and inflation is one of the signs reflecting that.
Furthemore, MMT fanboys cheerfully make the assumption that the government’s unlimited spending power is fine because the government, being the violent monopoly in any country, has the power to tax and that this power also creates “demand” (out of fear, no doubt) for the currency. The very real possibility that people will simply stop laboring unless forced to (loss of productivity) and revolt if forced to, is entirely ignored.
Well, guess what, the enlightened rulers of Zimbabwe must have believed this great theory as well.
As for “hyperinflation not having occurred for 150 years” – various fiscal discipline curbs have been in place for 150 years, as the original founders of central banks unlike MMTers understood the effects of reckless money creation rather well. As your quoted article points out, these curbs have been practically removed since 2008/2009.
So the more realistic conclusion concerning that missing hyperinflation is: “you just wait a little bit and see how that magic money tree works out in practice without the curbs”.
“they somehow fail to notice the real economic consequences of reckless spending ”
Entirely the opposite of course.
MMT points out that trying to control ‘money supply’ is a fool’s errand. What you need to control is what you spend it on, and make sure that there are no oligopolies or other monopolies in the jurisdiction.
In other words inflation is always everywhere a lack of competition. Stable prices require firms constantly concerned for their market share, and workers constantly concerned for their jobs.
“Well, guess what, the enlightened rulers of Zimbabwe must have believed this great theory as well.”
They believed in giving land to people that can’t farm, which destroyed the supply side. They believed in 30% interest rates and a pegged currency to the dollar. And off we go again.
But no, it’s money supply that causes the problem, not stupid supply side policies and listening to the clowns at the IMF.
Fiscal discipline isn’t about controlling the amount of money. It’s controlling the price you pay for things. Government is entitled to provision itself as it is democratically elected to do so. We give it the power to tax. It can discount that at will, but must use it judiciously.
Then the system stabilises. Government spending stops when it runs out of things to buy at a price it is prepared to pay
It is the job of Parliament to make sure that is done, and ultimately us at the ballot box to elect politicians capable of doing so.
“The very real possibility that people will simply stop laboring unless forced to (loss of productivity) and revolt if forced to, is entirely ignored.”
Not really. Once again you’re missing the other side. If more money is created and spent, then incomes go up and that’s where the increase tax comes from. It’s not the rate that has change, but the volume – which creates more tax.
That is, after all, how percentages work.
Quite why you think increased sales for firms is going to cause lower productivity is one I would like you to explain.
“Government is entitled to provision itself as it is democratically elected to do so.”
No. The government is only elected to spend public funds on projects that would otherwise receive no funding at all because of the failure of market forces. Literally everything else is funded better by decisions of private sector rather than by the government (or the bunch of their supporting fools in the parliament).
And as for the government spending creating welfare by raising incomes… the nominal incomes do rise, but because of foolish spending by government prices rise faster, and that’s precisely what we call runaway inflation.
As a thought experiment imagine if the government ordered half of all people to dig holes and the other half to fill them back up. Consider how wonderfully the incomes would rise and what would happen to the prices of everything else and how much real goods/services the diggers and fillers could afford after a prolonged period of such brilliant policy.
This ridiculous example is actually not far off from what has been achieved by worldwide governments over the past two years.
Utter balderdash. Inflation used to be known as what it is: an excess issue of paper currency, irredeemable in specie. Soaring prices are a consequence of inflation, nit inflation itself.
Reducing supply and creating shortages is obviously a very important factor – as we see they are deliberately doing.
Inflation is an expansion of the money supply. Prices ultimately reflect reality.
Prices reflect what buyers competing for a limited supply of actually valuable products (including services) are willing to pay. Corona policies drastically increased the amount of available money while decreasing the amount of actually valuable products. This increases buyer competition, hence, prices go up.
This is still an oversimplification, but the so-called cost of living crisis is a direct effect of the so-called Corona crisis: Goverments printing money doesn’t really help anyone. It’s basically just a method the government can employ to swindle its creditors.
“Putin might have made a terrible misjudgement“
Possible, but not looking that way at the moment. Quite the contrary.
Of course, that requires one to be capable of seeing past the rather comical “defeated Russia” war propaganda that has filled the US sphere lying media. We are now nearly three months on from the first declarations by US sphere “experts” of Russia’s military defeat – out of morale, ammo, supplies and soldiers and about to collapse. Yet the allied militaries (of Russia and the Donetsk and Lugansk militias) still consistently, repeatedly achieve the hardest task in military action, namely defeating, head on, well manned and constructed defensive lines built up over years, manned by NATO trained and equipped troops, with numbers that are overall significantly less than the defenders. they do this using massive fire superiority (air, artillery, standoff), courageous and competent soldiers and competent command.
And the key issue isn’t even the military one. Putin’s main vindication here as a national leader has been the success of Russia in brushing off the US sphere’s primary weapon – its “shock and awe” economic warfare. Russia has been preparing for this for years, but still most in the US sphere expected the Russian economy to collapse. It has not, and that must be largely credited to diligent Russian preparation and leadership.
“but you can be sure that one of the reasons he went ahead was that he must have spotted a beleaguered and badly damaged West that would be far less able to withstand the economic fallout of his invasion“
Highly doubtful. It’s pretty clear that Russia’s hand was forced by the ongoing buildup and NATO-isation of the Ukrainian military, and the possibility of an imminent escalation in the ongoing war against the Donbas autonomists.
Russia had to confront the situation in the Ukraine and deal with ongoing US/NATO aggression sooner or later. No responsible Russia leader could have done anything else. The only issues were could it be done, and when should it be done. The price was only going to rise. Russia, too, was still building up from its low point in the post-Soviet collapse thirty years ago, but much of the recovery had been achieved, and it was up to Russia’s leadership to assess the correct moment for the intervention in the ongoing war in the Ukraine.
Only time will tell if the decision was correct, because only success can vindicate a national leader.
Cracking post Mark. Similar commentary on yesterday’s UK Column by the way.
It’s pretty clear that Russia’s hand was forced by the ongoing buildup and NATO-isation of the Ukrainian military, and the possibility of an imminent escalation in the ongoing war against the Donbas autonomists.
A lovely example of weasel-wording. In plain English, this means roughly: An invasion of Ukraine was always considered to be in the strategic interest of Russia. It happened this year because the Russian government believes this was a good time for it, ie, due to fears that the strategic positon of Russia might become worse in the not-too-distant future.
No weasel wording here – that’s broadly what it says and what it means, differing mainly in how serious one considers the likely consequences of inaction to have been for Russia. This is a realist summary of the situation.
What you are getting at, I assume, is the subjective moral overlay based on the interpretation of “Russia’s hand was forced ” versus “in the strategic interest of Russia“, and whether it means that the action was “necessary” (and therefore in some views morally justified, or “greedy” and therefore in some views morally unjustifiable.
Doubtless we have different opinions on those issues.
I have absolutely no opinion on the morality of Putin’s invasion. States go to war because their rulers think it suits them, or, to quote Clausewitz, War is conducting politics with different means. People trying to define just war, eg, Frederick the Great, invariably come up with a definition justifying their wars and condemning those of their opponents. It always boils down to We are the good guys because we’re fighting the bad guys. The UN charta is no different in this respect.
Example of that: The town of Stettin and the surrounding area were to the west of the proposed boundary between Germany and Poland. But the Poles wanted to have it and the Germans couldn’t stop them from it anymore. So, they invaded the territory and annexed it. Just war because the right guys were attacking the wrong guys. They also justly drove out the civil population afterwards.
What I was getting at is that possibility of an imminent escalation means Putin claims to believe that this was about to happen which, in turn, means It wasn’t happening and that the hand of an invading party can only be forced by an ongoing buildup of the force one would encounter when invading if the invasion was supposed to take place anyway. Otherwise, the build-up would be of no concern. Even assuming – and that’s quite of a stretch – that Putin was afraid of Ukraine eventually invading Russia, a build-up of Russian forces would be the answer of someone not planning an aggressive move who started from a position of superiority in this respect.
“The UN charta is no different in this respect.”
Actually I don’t think so. In theory at least the UN charter approach was an attempt to introduce a quasi-governmental collective authority over states that would determine when the use of force is permitted and ban it in all other cases (except emergency defence).
Granted you can say it amounts to the same thing in practice, but there is a difference imo.
“What I was getting at is that possibility of an imminent escalation means Putin claims to believe that this was about to happen which, in turn, means It wasn’t happening and that the hand of an invading party can only be forced by an ongoing buildup of the force one would encounter when invading if the invasion was supposed to take place anyway. Otherwise, the build-up would be of no concern. Even assuming – and that’s quite of a stretch – that Putin was afraid of Ukraine eventually invading Russia, a build-up of Russian forces would be the answer of someone not planning an aggressive move who started from a position of superiority in this respect.“
This doesn’t seem to have any relevant meaning beyond that you disagree with me about the situation.
Putin wasn’t “afraid of Ukraine [alone] eventually invading Russia”, he (along with a fairly broad Russian establishment political consensus) knew based on experience and real world track record that the US would use Ukraine as a base and as a proxy for pushing its well established policy of destabilisation and regime change in Russia, and ultimately, if the opportunity arose, stage an outright attack, as was done to Serbia and Iraq. And he knew that if NATO was allowed to build the Ukraine up for much longer, then it would become extremely costly and possibly impossible to deal with the matter by force.
One of the amusing ironies of these kinds of conversations is that in most cases the very same people insisting that it’s totally unreasonable for Russia to act on a perceived threat from NATO, would be the first to be squealing for action to address far more remote and implausible or trivial supposed threats to their own nation (see US sphere Cold War hysterics, “War on Terror” hysterics, etc).
But it was happening.
Western Ukraine bombarded eastern Ukraine for seven days while the Russians stood off and waited until there could be no doubt who were the aggressors.
There is one vital element you miss from all your posts.
If a UN member state is unjustly attacked by another state, irrespective of either’s membership of NATO, another UN member state is, under international law, entitled to come to its assistance.
So, if Russia’s intervention in Ukraine is not legal, why have no other UN member states moved to assist Ukraine?
Seems fair enough to me. I would hope our own government would do the same for us.
Yes, it is pretentious Putin fangirling from the resident Putin fangirl, advocating domestic abuse as foreign policy.
Total nonsense.
I agree in part, but the Russians neutralised Ukrainian firepower from day one by eliminating all of it’s ground radar. That gave Russia air superiority as Ukrainian aircraft were essentially flying blind. They just got blown out the sky from ground and air.
With no air presence there was no ability to target either artillery or mechanised forces to where the Russians were. This is why the call went up for NATO to create a no fly zone, and the reason Putin said “Try it!”.
Russia, on the other hand, are using their air superiority to identify emerging threats, like artillery emplacements, and use their ground assets to target and destroy them.
The west is shovelling armaments to Ukraine, but what they don’t tell us is they are outdated hand me down, according to one analyst.
The modern Javelin anti tank weapons have been delivered but few are trained to use them. And when they do use them it’s a death sentence as they are identified by air assets and taken out.
I watched some drone footage, allegedly Russian, showing Russian troops pursuing Ukrainian troops through trenches. The drone operator was relaying the locations of even hidden Ukrainians to the Russian troops, who were basically lobbing grenades into their hiding positions.
Even if the footage was fake, that’s the kind of control air superiority has these days. No need for expensive air carried ordnance to take out one stubborn soldier, just tell the guys on the ground where he is.
The Russians seem to run a cheap war. Whilst they have smart bombs and clever technology, they prefer not to waste it. They seem to rely on more conventional ground superiority and employ air superiority to direct it.
“but you can be sure that one of the reasons he went ahead was that he must have spotted a beleaguered and badly damaged West that would be far less able to withstand the economic fallout of his invasion.“ “Highly doubtful.”
True, but there’s no doubt from his own words (much under-referenced) that he spotted a moral and spiritual decline in the West that threatens not only his own nation, but the world. The political duplicity of NATO, whilst the most immediate threat, is to some extent a symptom of the bigger problem.
Putin’s mis-judgement was to believe he could ever trust the Deep State US and Europe, determined to provoke confrontation to achieve the demolition of Russia.
I think we can all agree that all policies put in place at global, national or local level have but one aim, the death of as many of us usless eaters as possible.
For the last 2.5 years the world hasn’t been making as much stuff.
I wonder why that was.
Supply dries up and demand rises, so err – Yes, just print more money (and then give most of it to the banks)….I wonder if even “O” level economics/between Wars Germany is taught anymore.
But, it will be Putin’s fault and/or the necessity of lockdowns to combat the oh so deadly “virus”.
The entire system has become so complex, with so many feedback loops, that it is literally out of our control now. Human wisdom has not kept pace with this exponentially growing complexity. If anything it is now going backwards. So to the extent we do try to exercise some degree of control over this monster system we have created, we screw things up anyway. So basically it’s all coming apart. But we had a good run. Frankly I’m surprised we made it this far, June 2022.
Why didn’t it seem so complex under Trump?
He was on good terms with Putin, wasn’t a fan of NATO and wanted America out of the WHO.
China wasn’t particularly bold about Taiwan, he had Kim Jong-un eating out his hand, and he negotiated the Abraham accord in the Middle east.
I felt safer with Trump in the Whitehouse than I have at any time in the past 65 years.
You should have published 16 monbths agoi, as you now appreciate. Many of us have ben drawing attention to the continued excess money in the economy for years not months.
For most of that time the terms of trade changed in many markets so the effect of excess money was reflected in asset prices not usually in traded goods and services. Now the problem has come out into the open and inflation will not be controlled until the volume of money is controlled. Any claim to the contrary runs inbto the formulae you included in your article and it has been repeatedly confirmed by previous monetary splurges i the past.
While the funding of lockdown gave the problem a huge boost and arguably cicked off inflation, the cause goes back further.
Among the results will be the impoverishment of savers and the enrichment of chancers with large outstanding debts; the debt will be deflated and so long as their income can be sustained at or above inflation they are laughing. This includes governments.
Inflation allows politicians to spend without public or legislative approval and avoid the consequences. No doubt a list of villains will be drawn up in due course. In the 1960s and 1970s it was trs=ades unions, inefficient management and swiss bankers. It was speculators and exceptional conditions. All made up to shield the political class.
So, you think that TPTB did what the ‘experts/modellers’ suggested, calmly and dutifully following the instructions of their minions???
Personally, I prefer the idea that the ‘experts/modellers’ produced the results desired by TPTB. Let’s face it, the whole lot of them were and are of the sort who have been bought and paid for many times over and were fully aware of which side of their bread was to be buttered..
You cannot turn the entire economy on and off like a light switch.
Although the off switch worked quite well!
“Switch off the life support machine. Wait a day. Switch it on again.” What could possibly go wrong?
The lights don’t work as well. I now have to buy these “Green” light bulbs that cost 3X as much as the old ones and don’t even keep my room bright. I’m typing in a study right now with light bulbs that might as well not even be in the light fixture.
And yet the very same people who were ecstatic about more and tougher lockdowns are now crying about inflation the most
The buffoons running our country haven’t had to make a political decision in the last 40 years, it’s all been done for them by bureaucrats in Brussels.
The lessons outlined in this article are having to be relearned by these fools, the hard way.
Not the hard way for them, mind you, but for us, the little people who work to earn the Taxes that they recklessly dispose of.
Boris’ neck is on the line right now. It’s known 24 letters of no confidence have been submitted to Brady. Theresa May faced the sack when 28 known letters were submitted.
Personally, I’m hoping Steve Baker, MP for Wycombe throws his hat in the ring. He’s a staunch and genuine Brexiter. He’s worked in the real world; in the RAF as an Engineering Officer, a flying officer, and flight lieutenant before going on to a career in commerce as a consulting software engineer.
Politically, he’s organised and led back bench revolts, and he’s scathing of NetZero, recently forwarding an article by Andrew Montford – Ten things everyone should know about climate models. https://tinyurl.com/3dpbt4m4
We all have our favourites picked out, I guess, but to me, Baker exhibits a level of courage and intelligence few other Conservative politicians do.
If you have no opinion on the matter, and can’t think of anyone in the Conservative party who displays sufficient integrity to run the country, perhaps you might want to look him up.
Baker’s certainly among the least worst “Conservatives” in the commons.
That’s not saying all that much, though. He was pretty pusillanimous at times on the covid stuff as far as I can recall, though he also talked a good fight occasionally.
I can’t see the point in replacing Johnson with any of the other covid Guilty Men in the cabinet. If Baker were the alternative I’d support him but I suspect it will be one of the aforementioned Guilty Men who replaces Johnson if he goes.
Quote from an article by Rt Hon Mark Harper MP (Chair of the Covid Recovery Group) and Steve Baker MP (Deputy Chair of the Covid Recovery Group), from an article published in the Mail on Sunday.
“There is no logic in having a lockdown only for millions more people and businesses to have to live and operate under increasingly severe restrictions afterwards. And it is even harder to stomach when there is no transparency or logic from Government about what the criteria are for moving areas between or down the tiers.”
Going on to say: “Cycles of lockdowns and restrictions have failed. We need a strategy that slows the spread of Covid. The public and Parliament must be trusted with the data and analysis about the full impact these rules are having on people’s lives. And we need a clear exit strategy so that people feel hope and optimism for 2021.”
Full article Dated December 19th 2020 available on Bakers website here: https://www.stevebaker.info/2020/12/our-response-to-covid-must-be-rational-and-balanced-not-driven-by-panic/
You might also want to read his views on NetZero: https://tinyurl.com/3dpbt4m4
Tend to agree on your observations.
The Remainer/soft Brexit CONs, who are still the majority in the Commons will NEVER allow Steve Baker anywhere near the ballot paper.
Then he should beak away with 100 MPs and stand alone. This thoroughly rotten to the core Conservative Party does not deserve to survive.
We need a return to real politics with some conviction !
I mostly agree, but there’s one section I’d poke sticks at:
“It all goes hideously wrong if you start increasing the money supply when the goods and services haven’t increased or even worse when they’ve actually diminished.”
It all goes wrong before this.
If the government have the ability to increase the money supply on a whim, then it’s already gone wrong – because prices are dictated by the government, rather than the market. That’s not democracy, it’s dictatorship.
I’ll be a bit miffed at the effect this will have on me personally, and other lockdown sceptics, but this will be more than compensated by the joy of watching all those credulous morons who went along with it all having their savings torched, unable to heat their homes or afford basic necessities. It’s payback time, quite literally. It’s just a shame the rest of us have to be dragged down with them.
I won’t feel compensated. However I have been preparing. I’m guessing many here have as well. Things can get really bad and we should be networking a lot more than I think we have been.
Unfortunately, sceptics are also most likely poor social orginisers. Rebels don’t make good group members or group leaders.
A couple of years ago, the “narrative” about inflation was that it was “low” and contained. Believe it or not, many experts at the Fed thought that inflation was too low. Many experts believed the economy needed MORE inflation. Ever the contrarian, I was convinced that the “data” on inflation was wrong and indeed rigged.
Correctly understood, inflation has been far higher than the experts said for many years. Officials at the Bureau of Labor Statistics have changed the formula for calculating inflation many times. (Control the data, control the narrative). Today, we are told that inflation is the “highest in 40 years.” No, it’s really the highest it’s ever been in anyone’s lifetime, probably in U.S. history. If the government tells us inflation is 7.5 percent, we can be sure the real figure is 15 or 20 percent. At least that’s what CPI would be if it was calculated the same way it was in, say, 1979.
One article of mine that did get published was on “shrinkflation,” the sneaky way companies reduce the size of packages to conceal real inflation. This has been happening for decades, but was already conspicuous a couple of years ago. Now we of course have hyper shrinkflation. “Substitution” as well. “Substitution” is when manufacturers substitute cheaper ingredients or parts to also conceal real inflation. This is why our Ritz Cracker don’t taste as good or our soups seem more watered down.
In a sidebar piece, I identified scores of “workarounds” that families and consumer are forced utilize to deal with allegedly non-existent inflation.
For example, to deal with risking prices, families buy chicken instead of steak or hamburger; they drop out of civic clubs or country clubs; they buy in bulk (to get volume discounts); they buy store brands instead of more expensive name brands; we get our hair cut less often; cut out the maid; go to the dentist less often; go to the movies or sporting events less often; “cut the chord” on cable TV; cut out or cut back on dry cleaning … Not nearly as many people hunt, fish or play golf as often as they once did … the list of “workarounds” goes on an on.
My point was simple. If inflation was no big deal – or wasn’t occurring – millions of people would NOT be using all of these “workarounds.”
The biggest workarounds were mothers and women going to work (the necessity of the two-income family) and families choosing to having fewer children. Church attendance has probably even gone down because people don’t want to have to make a weekly donation in the collection plate.
As I thought about more about this topic, I began to see “workarounds” everywhere. Businesses employ them just as much as families. Indeed, half the big macro political issues have to do with mandatory corporate workarounds dealing with inflation. That’s why businesses MUST have (cheap) legal or illegal immigrants. That’s why corporations moved their factories to China and then Vietnam or Mexico. Yes, this made shareholders and executives richer, but it also kept the final price of widgets lower than they would have been if these products were made in America. Nobody likes losing manufacturing jobs, but at the same time, people like buying a pair of underwear from Wal-Mart for $5 instead of $10. Automation and robotics replaced more expensive jobs. We now order our Big Macs from Kiosks; we now go through self-check-outs. Workarounds. Workarounds. Workarounds.
Politicians know all about workarounds. If our local politicians are afraid to raise taxes, they raise fines on speeding tickets or running a red light – violators nabbed by a camera not a real cop.
When I think about the world in 2022, I see scores of new and mandatory workarounds.
At some point all the easy workarounds will have already been done. At some point, people will have have maxed out their credit cards and fell behind three months on their house payments. This is probably why all of the big investment funds are buying up every house they can. When people need housing and can’t qualify for mortgages, they will have to rent from these landlords (who are not going to lower said rents).
The root cause of inflation is “money printing.” Which isn’t going to stop because the government isn’t going to get smaller. The “cure” for inflation will be more money printing.
As Ron Paul told us decades ago, inflation is the cruelest tax of them all … and it’s been rising faster than most of us appreciated … for decades.
I still don’t know one person under 70 who died from Covid. But everybody I know is cussing inflation …. and scared to death that the worst is still to come.
The “watchdog press” also helped cultivate the myth that inflation was no big deal (and that the economy was just great, when it really wasn’t). The press should have known this.
I have worked at media companies as both a reporter and as an ad salesperson. It’s from this latter gig that I knew years ago that inflation was worse than we’d been told. I knew this because I knew that companies that used to be big advertisers were either cutting out or significantly cutting back on advertising. Here I am talking mostly about the locally-owned, “Mom and Pop” businesses. When things get tough for businesses, one of the easiest places the business owner can save money is by reducing or eliminating advertising (for newspaper ads, TV commercials, radio commercials, billboards, etc).
Today, it seems like the only businesses that can afford to advertise are plaintiff trial lawyer firms and Big Pharma.
Since media companies are earning less money in advertising, they have to employ their own workarounds. With journalism companies, this means slashing news rooms, which means far fewer reporters and more “canned” or fluff stories that are run across multiple stations. The news consumers get far less real news, far less “investigative reporting” and the stories we do get are awful.
So while the economics reporters were running all those stories about a piping great economy, the advertising manager knew a different story. So did all the circulation managers. What’s one of the top “workarounds” for struggling families? Cutting out paid subscriptions!
In numerous posts I’ve opined that what the world needs is some REAL investigative journalism to expose all of these bogus narratives. But even if journalists were inclined to do such investigations (they’re not), they don’t have enough reporters to work on these time-consuming complex investigations.
As sorry as the state of journalism is in the world, inflation trends tells us we’re going to get even less of it in the future … Which is perfect for the crooks and frauds who don’t want anyone holding them accountable.
My first two articles as a freelance writer weren’t on Covid topics, they were on inflation topics.
The first was about shrinkflation. The second was about all of the “workarounds” families must use to deal with inflation. I’m particularly proud of the second piece because I think it was fairly original. I went to a lot of trouble to find links that supported all of the “workarounds” I identified.
This is from three years ago. I need to update this list. Anyway, I think I was on to something …
https://www.oftwominds.com/blogmay19/workarounds5-19.html
https://www.theamericanconservative.com/articles/what-shrinking-toilet-paper-has-to-do-with-inflation/
Also don’t forget about the asset bubbles – which are basically symptoms of inflation that has not yet transferred into consumer prices yet. It looks harmless as long as supply of goods and services exceeds actual demand and while asset owners believe in their paper wealth as insurance for a comfortable future.
But it rapidly converts into actual inflation when the supply is forcibly shrunk by idiot decisions and all those “rich” asset owners become worried about the real buying power of their virtual “investments” – and instead start looking for more tangible ways to save and protect their wealth – then it starts spilling over to real economy – just as is happening now.
I lean libertarian and thus don’t really believe in government setting a mandatory minimum wage. This stipulated, the minimum wage we have in America is a sad joke. $7.50/hour is not going to support anyone for 10 days, much less a month. But I note that the official minimum wage hasn’t been raised for decades. This is a “workaround” by the Powers that Be – they know if they raise it, it will make inflation even worse. Illegal immigration, off-sourcing jobs to cheap labor countries, not raising the minimum wage – IMO all were designed and supported to keep inflation from being even higher and more conspicuous.
The poor get poorer; the very rich get richer.
Message to the author: Ludwig Von Mises predicted a currency collapse in what was Imperial Germany in 1912, given the government was spending more than it was taking in from taxation.
An American economist whose name I forget made the same prediction in 1917.
Weimar Germany continued this policy of deficit financing until its inevitable conclusion in 1923.
For the life of me, I don’t get why so many people think what happened in Weimar Germany can’t happen in America or the United Kingdom. I think it’s probably inevitable. One reason: Our “leaders” are even worse today than they were then. There are far fewer journalism skeptics trying to expose real truths.
Yes, causality is real, causality exists and copying the policies of Imperial Germany and Weimar Germany must achieve the same result.
Don’t forget the imperative to bust the Versailles “Reparations” tyranny!
Versailles was, according to Ludwig Von Mises, rarely enforced.
Johnson didn’t just happen to listen to one set of advisers/ epidemiologist (Ferguson), he chose to listen ONLY to them because he knew they would provide the justification for shutting the country down.. he could say ‘sincerely’ that he was “following the science”. You would have to ask yourself why in March 2020 he chose to go with the serial failure Ferguson’s model- he needed it to order the lockdown. Planned. It could not be plainer! I know it has been pointed out before but that decision to use the Ferguson model ( knowing as he must have of the latter’s wild failed projections) set the past 2 years destruction rolling.
The cost of living’s ‘exponential’ increase, the travel disruption, fuel increases are all up close and personal but Johnson needs to be pinned on what he chose to do in March 2020.
Correct. Johnson intended that SAGE and “following the science” would be his shield from the outset.
His life long task has always been to dodge any responsibility for the mess he makes
Yes, he’s a narcissist and domestic abuser at heart.
“Nor did they seem inclined to consider anyone else’e views””
So there was a catastrophic failure by SAGE and their non-existent cost-benefit analysis then. In a sane world, the political party responssible and their collaborators would be unelectable for a generation. Being in the unfortunate position of wanting to take a driving test and needing to renew my passport (thanks to the lockdowns), as well as having savings, I am very very angry. Dirty government scum (and the “opposition”)..
Oh, and they’re thieves.
If by “extremist politics” the author means more personal responsibility, freedom and a shrinking of the interventionist redistributive welfare government, then bring it on. Unfortunately this extremism will never happen… democracy is collectivist in nature. Ever-growing government bureaucracy and parasitism is a feature not a bug. It is totalitarianism by the will of the majority as everyone looks to maximise his benefit and shift the burden of costs to others by voting for the politicians who can promise the most (aka free stuff). Then the incentive of the party in power is to overspend and borrow: let someone else pick up the bill 5-10 years down the line. Special interest groups control the government, not you with your one vote every 4 years!!
If inflation wipes out debts then those people with mortgages will be happy
Back in the 70s inflation was accompanied by steady increases in mortgage rates. I met people who had to sell up, and even as a young GP with a new partnership share it was a struggle to keep up.
Indeed it was.
If you print money to pay for insane lockup policies you get inflation. Every one with even a basic economic education knows that.
Which is precisely why they did it.
Great article. The underlying issue, of failing to impact assess changes in (what are, in effect) business processes, is typical of politicians and academics who do not understand business.
Anyone who signs up for a basic management course is taught that you DON’T implement change without properly assessing what the impact might be, for down that route lies ruin.
The people of this country, whose rights were so abused over the last two years, deserve far better from both politicians and ‘advisors’.
Just thinking about it, pre-Blair, government used to have its own experts in civil service labs, and the nationalised industries. Our Tone decided to move all that work to his friends in academia, who of course are much more open to influence from outside the UK, and may well lack the understanding of government as a whole… as indeed has been shown.
But for ministers not to consider any of the risks of lockdown, that shows just how ill qualified they ALL are for the roles in which they find themselves.
And when runaway inflation wipes out your pension, and the banks call in your mortgage loan (or your house is reposessed because you can’t pay) you will own nothing and be happy, welcome to 2030 WEF style.
When the only money available is UBI and a Defacto Digital slavery via CBDC “a solution looking for a problem”
See how “cock-up” theory works then, when it’s too late.
Of course it was predicted and was one of the principal reason for forcing Lockdowns on the world – I should have thought that was obvious by now.
As the full diabolical project against humanity oin many fronts is being revealed ,we do really need to stop being so naive to stand any chance of surviving what they are now so blatantly planning for us all.
Same principle could be applied with the Tories immigration inflation.
Deliberate – more destabilising of a stable society. Then look at the characters now dominant in TV advertising.
Lower than average wage (i.e. subsidised) immigration is a “welfare payment” to rich landholders and large employers from middle class taxpayers.
Of course it was predicted and was one of the principal reason for forcing Lockdowns on the world – I should have thought that was obvious by now.
As the full Global project against humanity, on so many fronts, is being revealed ,we do really need to stop being so naive to stand any chance of surviving what they are now so blatantly planning for us all.
Guy’s economics are sound (I’m an energy economist), but he misses the most significant factor.
The corollary of this is that when the quantity of goods and services decreases, the supply of money has to be decreased.
Since all goods and services require energy, the quantity of goods and services is determined by the availability and cost of energy. The 2008 financial crash was caused by the rollover in the net global supply of energy in 2006, after which it started to contract. The trillions of dollars of debt printing since then to maintain the illusion of solvency in the global financial system is a consequence of that.
So called “Net Zero” policies introduced by our financially and energy illiterate government are catastrophically accelerating this. Replacing affordable, dense energy supplies with unaffordable, intermitted, diffuse sources reduces the quantity of goods and services the economy can produce, widening the gap with the money supply.
This is the dominant driver of hyperinflation.
““The social and economic effects of the measures which are needed to achieve this policy goal will be profound.”
And they were implemented deliberately precisely because they would be profound. It was a Plandemic of the Globalist Elite ….. as far as they are concerned it’s creative destruction so they can “Build Back Better” in a way that suits them.
@Guy: some tips for your next article about inflation:
A shrewd post indeed Guy, additional costs but never factored, the jab injury list begins to grow and grow. Some hack in the business section of the Daily Telegraph. Talking on inflation told it that we are at war implying the Ukraine, I never knew Johnson had declared thus, although he craves it with all his heart. He’s the boss, he’s off his rocker and begs the question, what hope?
Cheer up Sceptics, the Evening Standard reckons salvation is imminent:
https://www.standard.co.uk/news/politics/downing-street-press-conference-cost-of-living-covid-b1003614.html
“…Downing Street set to hold weekly press conferences over cost of living crisis.”
The social and economic effects of throwing trillions at lockdown populations created an even bigger class of addiction to entitlements and government welfare for able bodied populations. This entitlement addiction is a war without bullets.