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More than that, inflation seems to coexist quite happily with a decrease in political power for the capitalist classes and an increase in power for everyone else.

It's not until you get hyperinflation that everyone loses. But hyperinflation != inflation.

In the media, 'inflation' was always the word used as a substitute for 'don't be greedy and claim more than your fair share of the wages and salary pie.'

And when we had epic inflation in the 70s in the UK, 'everyone knows' it was caused by greedy unions, and oil price shocks were incidental to the point of being irrelevant.

In fact, inflation cannot be caused by bankers or corporations, by definition. So when the British energy industry is hiking prices, or when the BoE and the government are deliberately trying to create a property bubble, or when supermarkets keep prices artificially high, that's not inflation - that's an unavoidable and entirely understandable increase in consumer prices.

As far as mainstream narratives are concerned, it's only when workers ask for more money that inflation happens.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Nov 19th, 2013 at 11:27:21 AM EST
[ Parent ]
I usually find your comments understandable enough, however oblique in many cases. However, I'm lost on this one. Perhaps you are engaging in a very subtle sarcasm.

"In fact, inflation cannot be caused by bankers or corporations, by definition." Pardon me? Whose definition? OK - maybe government policy is the important causation. Then who controls the government?

At least in the U.S., where the government has steadily eroded the 'social safety net's system' response to price increases (better term than inflation?), the effect is wealth transfer from this system to the main beneficiaries of the other government-based welfare system - corporations and banks (particularly the military-industrial complex).

paul spencer

by paul spencer (paulgspencer@gmail.com) on Tue Nov 19th, 2013 at 01:20:32 PM EST
[ Parent ]
I'd have assessed that at the "dripping in sarcasm, applied with a large ladle" level.
by Colman (colman at eurotrib.com) on Tue Nov 19th, 2013 at 01:24:04 PM EST
[ Parent ]
so I'm naive.

paul spencer
by paul spencer (paulgspencer@gmail.com) on Tue Nov 19th, 2013 at 01:56:37 PM EST
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That wasn't sarcasm so much as irony.

To spell it out - the major cause of spending power erosion for working people is corporate and financial action.

In reality, there is no other cause. Between increased costs due to speculation, oligopolistic profiteering, and overbilling for government services, with a bit of corruption to grease the wheels, wage demands and government welfare spending are pretty much irrelevant. (And when was the last time you heard of someone making a wage demand?)

The 'by definition' part is the fact that even on those rare occasions when corporate and financial action is quietly - very quietly - allowed to have created inflation, the only acceptable remedies are further downward pressure on wages, and cuts to government spending.

Price - i.e. profit - controls are utterly unacceptable.

In economic propaganda-land, there is no causal link whatsoever between increased prices created by asset/commodity profiteering+speculation, and official unicorn fart inflation, which is the number that gets bandied around on the news as a target.

Only worker demands and public spending can create inflation. No other economic agent is ever responsible.

If it starts to look like some other agent might be responsible, you can - and should - change the technical calculation used to define the inflation figures, and all is right with the world again. (E.g. I understand that by using vintage definitions of inflation, the real rate in most Western countries is very much higher than the 2% or so we're told it is.)

Of course all of this is insane double-think, and a naked lie. Even so - it's a very popular and persistent lie.

I don't doubt some economists have a more sophisticated understanding. But if they do they won't get a lot of air time, and they'll have even less opportunity to set policy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Nov 19th, 2013 at 02:27:23 PM EST
[ Parent ]
I apologize for doubting you.

paul spencer
by paul spencer (paulgspencer@gmail.com) on Tue Nov 19th, 2013 at 05:06:44 PM EST
[ Parent ]

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