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This is sure to work! The Guardian has up a panel discussion with the title “Labour is in a mess. Is there anything Starmer can do to turn things around? Our panel responds”. One of the panellists is Ann Pettifor. She writes,
The Bank lacks tools and legitimacy to tackle inflation. Labour should transfer that role to a new Inflation Control Office, which could use taxes, price controls and even rationing to lower inflation. Then Reeves should change the Bank’s mandate, radically: to support the economic policy of the government, not the City.
As a means to “save” Keir Starmer’s government, I am not convinced by the rationing bit. True, price controls are nearly always popular – until tried. But the people’s cry of “We want an Inflation Control Office to stop us buying things!” is heard only in Ann Pettifor’s dreams. I would advise less rich food late at night.
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The Bank of England is the CREATOR of inflation – it creates the fiat money and backs up the Credit Bubbles of the banks.
As for an “Inflation Control Office” – with “taxes, price controls and even rationing…..” – this approach caused terrible harm when the Emperor Diocletian followed it, and when every other despotic tyrant followed it.
The Guardian newspaper today has become the opposite of what the people who founded the Manchester Guardian wanted it to be – it stands for tyranny.
ooooh! Maybe we could perhaps use some rationing: how about rationing…. the supply of fiat money?
Inflation is always and everywhere a monetary phenomenon.
Did they consider starting a war somewhere? That always bolsters the government. After all, Maggie did it.
Those Icelanders are getting pretty uppity, and we need revenge from our loss of the last war we had with Iceland.
Or maybe the middle east? That’s always a good place to start a war. Or surely there is some shithole little African country that is doing some sort of abuse of civil rights (censoring free speech for example) and we could all get outraged about that and send in the gunboats?
I know this is crazy, but one way they could reduce inflation is if the government would just spend less money. But that is obviously completely impossible. Or maybe kicking out all the people spending government money that have no legal right to be in Britain. That’d definitely help.
But I think the “start a war” thing is more realistic.
So a rock music journalist an obscure left wing not really an economist and a community organizer walk into a bar..
Do you remember when the Guardian used to publish articles written by people who actually had a clue what they were talking about. Had achieved something substantial in the real world. Of real merit.
But that was several decades ago.
This is what the bottom of the intellectual barrel looks like.
So when does the Guardians Trust Fund run out of money? Now that they flogged off everything of value.
Rationing would definitely work. Putting people on an ounce of butter and two ounces of cheese a week will send Starmer’s popularity soaring.
It appeals to socialists of course because they have a deep mistrust of freedom. Didn’t Bernie Saunders lament the choice of deodorant once in a supermarket? Under socialism, there will only be one brand of peoples’ deodorant. And it will be out of stock.
“So when does the Guardians Trust Fund run out of money? Now that they flogged off everything of value.”
Sadly they (The Scott Trust Ltd) have got over £1.2bn in the kitty, and the newspaper’s losses are in the region of £25-35m/yr in cash terms, and they are quite happy to use the services of the hated City to manage their investment fund, so it does tend to increase in value over time, so chances are the Grauniad can continue to run at a loss indefinitely. Even without any returns from the investment fund at all there’s enough cash there to cover current loss levels for nearly 50 years.
Reminds me of the point where Wesley Mouch cries “I need wider powers! . . . .”
Back to the most disastrous UK government post war: Clement Atlee’s ?
“Reminds me of the point where Wesley Mouch cries “I need wider powers! . . . .””
Everything reminds me of AS these days.
They could call their plan “Whip Inflation Now”.
John K. wrote:
“Under socialism, there will only be one brand of peoples’ deodorant. And it will be out of stock.”
– and it will smell worse than stale sweat.
I recall, when I travelled in the former Yugoslavia, in the 1980s, I was told that the local ladies desired few things more than Western deodorant, there was apparently a lucrative black market in this decadent bourgeois luxury, and from my own observations, the black market wasn’t coming near to meeting the demand.
Sure, price controls, rationing and taxes can remove inflation entirely. They will also remove most goods from the market entirely but, hey, omelette, eggs, what?
llater,
llamas
As you well know, the Argentinian junta started it, precisely to bolster their flagging popularity. Didn’t go so well for them.
I was told that feminine underwear was another much sought after thing. Because socialism doesn’t see the need for underwear to be anything but strictly practical. (This is in the era when half decent toilet paper was finally available, mind you.)
But this would make the new Inflation Control Office (a QUANGO I assume) more powerful than any Minister, including the Lord Chancellor. The Treasury is a jealous department and would work day and night to subvert the Inflation Control Office.
And the risk of the Inflation Control Office being used to promote political ends (rather than economic ends) would be a plum too rich to resist.
Can someone remind me which Political Party it was that put the Bank of England under independent control, in order to set monetary policy?
TDK – I think it was the Labour Party.
But it does not really matter – as the Bank of England should not exist. Even when it was technically “privately owned” (before 1946) it always rushed to create fiat money to save politically connected banks (but not banks that did not have important friends) from the consequences of their own Credit Bubbles.
For example the late 1840s (yes even that far back) under Prime Minister Russell – who suspended Peel’s Banking Act when the ink was hardly dry.
No money for Ireland – but always money to bail out the banks.
By the way banking was the start of the corruption of the Economist magazine – and of the Manchester Guardian newspaper.
They supported the free market – apart from for the banks (must not let the Credit Bubble banks collapse – must save them) – that corruption (and it is corruption – intellectual corruption) in the 19th century was the thin end of the wedge.
If you are going to bail out the banks (often in various hidden ways) – why not bail out the general population as well?
One can not have a Welfare State just for bankers – if they get bailed out, so, logically, must everyone else be bailed out.
@paul marks
I was being sarcastic, which I assume you got.
They did it in 1997 because the Labour Party had long been thought of as economically incompetent (albeit caring) and the Conservatives as good at managing the economy (but uncaring). Brown and Blair took advantage of the mess made by Major to claim they could now be trusted and making the BoE independent was part of that strategy.
Independence was always limited. The uni-party basically appointed the people it could trust to stick with the program.
It half amuses me that Ann Pettifor imagines that the bank is somehow outside of her people-like-us circle.
Paul,
It’s the old story… If ordinary folks are a grand in the hole they’re in trouble. If a bank is billions in the red then Gov does it’s White Knight act. Now the thing is when the Gov gets trillions so far into the red they’re in the infrared… we is all buggered.
Rach “borrowed”* GBP18bn last month alone. That’s about 250 quid for every man, woman and child in the country.
*The scare quotes are because I’m old school enough to believe “borrowing” means an intention and capability to return what is borrowed…
NickM – only if the bank has the right “friends”, if not – the bank goes to the wall. I was not kidding when I said the whole process is corrupt – it is corrupt, and always has been corrupt.
J.P. Morgan used to lend out three “Dollars” for every Dollar in physical gold that he really had – but he was saint compared to what most bankers (including British banks) did – even back then in the 1900s. As for NOW – there is no link with reality at all – none.
It, the monetary and financial system, is now entirely force and fraud. Professor Krugman’s “men with guns” and welfare takers in very expensive suits.
TDK – yes indeed I understood that you were in jest, and responded dead-pan.
You are quite correct, and put the matter well.
As for the Scott Trust (the “owner” of the Guardian). The tax advantages of trusts, and of corporations, have over individuals – are unacceptable.
“But Paul if we had to pay the taxes that individuals pay – we would be destroyed” – then REDUCE TAX RATES ON INDIVIDUALS – and get rid of the Death Tax (Inheritance Tax).
In several countries in Europe tax rates on both individuals and corporations is either 10% or 15%.
In Britain the top rate of Income Tax is 45%.
In California and New York City the top rate of Income Tax is even higher – if one counts State and local Income Taxes as well as the Federal Income Tax.
No wonder the economy ends up being subjected to a stranglehold by a handful of corporate entities – such as BlackRock, State Street and Vanguard (who have shares in-each-other) and the Credit Bubble banks.
“Anti Trust” laws (a bad idea anyway) are utterly pointless if most shares in the “competing” companies are “owned” by pension funds and other such and “managed” by BlackRock-State-Street-Vanguard.
Hollywood has several “competing” studios – but all the films, and television shows, have the same political stance, because the shares of these “competing” studios are controlled by the same institutions.
“I do not like Disney+, I will get Netflix instead, oh it is the same – I will try Amazon, oh it is the same as well…..”
They are all the same – all the entertainment television stations and film studios, because the shares in these entities are all controlled by other corporate entities (mostly the same corporate entities).
As for how Credit-Money concentrates tends to concentrate economic power in a few, corrupt, hands – I wish I could claim to have discovered this, but Richard Cantillon got there three centuries before me.
As one gets older one finds that other people have always “got there” (found something out) first – sometimes centuries before.
There are few great people who actually make new discoveries.
Wars do nothing to reduce inflation.
Quite the contrary!
@Snorri Godhi
Wars do nothing to reduce inflation.
Right but they distract from inflation and give an excuse for inflation.
Politicians don’t give a fig about inflation, they only care about being re-elected.
I think most people do not want war – and are, now, very resistant to propaganda trying to get them to support wars.
I believe that President Bush (the second) was sincere – that he was NOT going to war with bad motives, he just had no understanding of Islam (none) and, therefore, thought the problem was a few bad people (dictators and their henchpersons) who had “misinterpreted” or “twisted and distorted” Islam.
But accepting that President Bush was sincere does not recover the vast losses of resources (Trillions of Dollars) or bring the dead back to life.
Meanwhile in the United States streets are being named after terrorists from groups who killed HUNDREDS of Americans, and tortured others (terribly tortured other Americans – anyone who knows what happened to, for example, the head of the CIA section in Lebanon understands that “do not let them take you alive” is not Victorian melodrama, it is sound practical advice).
Followers of Islam have lived in the United States, for example Dearborn Michigan, for several generations – but there has been no real “assimilation” – not in the important things, beliefs – principles.
Of course they are naming streets after terrorists belonging to groups that killed hundred of Americans – and threatening any local resident who objects (no matter how polite – any objector is an “Islamophobe” who “is not welcome” in the land). No one should expect anything different.
Mohammed did NOT “misinterpret” or “twist and distort” the religion, and legal principles, he created – and neither do his followers.
What is the Ford Motor Company going to do?
In the 1930s Henry Ford had to, eventually, break with the German National Socialists – but they were thousands of miles away, Dearborn is where the Ford Company is based.
Your HQ building is in a town where most people want to crush non Muslims – as “Islamophobes”, “Islamophobe” means anyone who does-not-obey and “feel themselves subdued”.
This is a worse situation than the crazy contract that the Ford Motor Company signed with the State of California – about ending “emissions” of Carbon Dioxide (plant food gas). That deal with California ends at the end of 2026 – Dearborn, and other such places, is not going away – on the contrary, the danger expands and spreads.
And in a couple of months such a terrorist supporter may well be Mayor New York City – the largest city in the United States. Someone who accuses others of “genocide” when that is what he-himself wishes to do (“Projection”).
And the “neo-con” types at the Economist magazine still do not see the danger to Western nations.
14 centuries of conflict – and the “educated” “intellectuals” understand NOTHING.