Inflation 2022
The current UK economic model and why it is destined for failure.
On Feb 26 2020 I posted, after the announcement of Lock-Down; ‘If the economy is so important why are they doing this?!’ As it has turned out, if you shut off the [current type of] economy, it is much the same as stopping the heart in a body and then restarting it after a long period of time. The heart may have restarted but that is just the beginning of a whole list of problems, on-top of trying to stabilise the heart.
In 1986 Thatcher’s adoption of the American economic model was going great guns with deregulated economic growth and its subsequent spread throughout the working force of Britain. Even fringe comedians were holding ‘thick wads of cash’ while ‘pretending’ to be a plumber to criticise the capitalist new era in Britain.
As usual a period of rapid growth is followed by a jump/s in consumer spending, demand production and opportunist pricing increases. Inflation is next, followed by one responsive measure or another to bring about a deflation in consumer attitude that then leads to recessive readings, a recession and then [hopefully] a gradual re-growth of ‘normal’ generational behaviour. If a recession or lull in consumer confidents persists, the next generation go a little off the rails and another burst occurs. [This has happened most noticeably in post war Japan and is currently occurring in China]
In 1987 the end date for ‘MIRAS’ caused an already surging housing market to burn race plasma hot and then stall. The economy was not much cooler and the Thatcher government decided to push back on consumer spending by steadily raising interest rates. Shortly afterwards the petrol pumps started showing higher prices as the ‘fuel escalator’ kicked in.
At that time [in those situations] higher interest rates [with mortgages going from 8% to its highest at over 12%] the fuel escalator and the subsequent reduction in all businesses from Lloyds insurance to painters and decorators saw a fall. The effect on consumer spending was dramatically effective. No less dramatically effective upon the effect on peoples attitude towards saving and disposable income.
Along with the rise is consumer choice there was now much more choice in the shops for people on welfare. Therefore even shoplifters did not get left out of the rise in the standard of living. Local governments responded with increased revenue and improved social services to further dissociate people from the family nucleus and its varied shared responsibilities.
Jumping forward to 2007 – We saw the capitalist free market led economic mantra of global free market investment and profits evolving organically, becoming a Big Lie, as a corrupt, mad, short term business sector destruction led to an inevitable collapse. Did governments allow the sector to evolve under the economic organic model while protecting savers and owners of equity held by those banks? No. The government intervened and spent taxed money to save the business sector at great expense and without sector consequence.
Jump to 2022 – Inflation is raging in the UK. People [the mass] have no savings, live in inflated insecure accommodation and suffer an ongoing and increasing disparity between economic regions and non economic regions. This is partly due to government neglect and their belief [blind] in the provision of the UK free market model coupled to corporate tax breaks. Unfortunately free market global economics led to much cheaper labour with much keener workforces that further exacerbated de-industrialization in the UK and America. Trump made inroads to confront that issue. The UK have not.
In America the concept of global free market economics is dead. It has evolved away from the ideal of a pan-global market place to a fight for profits, resources access and control. In a nutshell; a geo-political weapon to achieve subjugation and control without [or before] the use of military revenge.
This is clearly understood by America [now] as a result of China learning and mastering the post / evolving Keynesian capitalist model. That also comes to China while being Totally Surrounded by the US Military. The game has changed but British ‘politician governors’ [oxymoron] are still talking a strong [or accepting] commitment to Thatcher game view.
The 2022 inflation is not being caused by a consumer flush bout of big spending. Raising interest at this time will just make poor people [the less well paid – under 52k] poorer.
This round of inflation is being cause by the post Lockdown global economic arrest, rising energy prices, the increasing further fuel escalator and higher personal taxes and rents fluctuating import volumes that are already interrupted. The bank of England will have no effect on the above forces by raising interest rates. [Although the base rate of interest should be fixed at 3% in [a] The Constitution with Millennia as an objective with a review every one century.]
In this time of [supposedly complete] Brexit freedom [from the domineering empire building E.u ‘club’] the government are faced [should be faced] with Nationalist Governing Interventions into the British markets that affect the Fundamentals of a stable society. Not only are they not doing this [with their 1985 Thatcher dated tone] but they are not facing a post-Keynesian / Corporate controlled future. They are not successfully Transitioning to net-zero but are reacting with emergency fixes that are destined for further energy problems, risks and expenses. [French reactors are off line because of a seen fault that was not avoided – Do you think the French will change the design enough to save ‘Les Anglo-Saxons’ from further needing E.u help – Will you have it monitored? Do we know the fix and how much more it will cost?] Is the nuclear [emergency fix] worth it all?
There is no plan for a UK net-minus. Trees would fix a bunch of problems for centuries to come.
Lastly the news of Priti Patels relationship with the immigration department sums up British governments connection to governing. Margaret Thatcher’s statement that it takes a woman to tell the men what to do to get things done is not true of women but only of Thatcher in her hey days.