Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
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
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I apologize for doubting you.

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