I read two articles yesterday that had a particular impact on me.
One was in the FT, and referred to Jay Powell's speech at Jackson Hole. Powell is, of course, chair of the US Federal Reserve. The Jackson Hole meeting is the annual meeting of the world's central bankers, who are the people who think they really rule the world.
Powell gave a hawkish speech. Although US core inflation is now down to only a little above 4%, he said that the task of beating inflation was not yet done, and in the process clearly implied that more interest rate rises are to come in the USA. No doubt other, equally stupid, governors of central banks will follow his example, including in the UK.
I use the word stupid advisedly. No one knows why we have a 2% inflation target. It was, once upon a time, chosen by the central bank of New Zealand, and then it was adopted by the world. There is, however, no theoretical justification for it. There is no evidence that it is any better than the other target. There is no evidence either that achieving it increases the well-being of anyone. The target could have easily been 3%, or even 4%. It is entirely possible that the world would have been just as well off as a result. Indeed, and as I reflected as I read the article, that will almost certainly soon prove to be the case now.
Powell's determination to achieve a goal that he cannot, and will never be able to, justify is an example of the supreme arrogance of some in society who have been given power over others, and believe that they are right as a consequence. There was no hint within his speech of doubt and no real apology for the pain that he will impose.
That pain will be real. It will be counted in lost jobs, failed businesses, homes lost to foreclosure, personal debt crises, couples torn apart, families separated, children denied the stability that they deserve, and blighted futures. All of those will be Powell's responsibility one day, when he will owe the most enormous apology for the folly of his actions. The same should be said of the Governor of the Bank of England, Andrew Bailey. I hope that one day he too will be held to account for the misery that he will have wholly unnecessarily imposed upon society as a consequence of his similarly arrogant pursuit of a policy that he knows is without justification.
The other article that I read was in the Guardian and referred to comments by Michael Parkinson‘s son, also called Michael. He noted that his father had suffered from impostor syndrome throughout his life.
Michael Parkinson was the son of a miner. He was brought up with all the hardship that resulted from that, including seeing his father suffer the physical consequence of that extraordinarily demanding job.
Michael Parkinson's parents did not want him to have to go down a mine. They were determined that their children should not suffer that fate, and Michael Parkinson did not do so. He became a journalist, and then the TV interview and personality who commanded massive audiences. He was, by any standard, extremely successful. But, as his son noted, he never overcame the doubt. That was with him until his dying day, and I am not surprised.
I am not saying that my own situation is the same as Michael Parkinson's. My parents both had professional qualifications, but they were the first in their families to have them, and I can still recall witnessing the poverty from which they, and most especially my mother, came in my childhood.
I saw the tin bath hanging behind my granny's back door, which was the only one that she and my handicapped aunt shared in my childhood, until my parents were able to help them get a house with a bath.
I remember, too, the fear that they both had of money, or rather its absence. This was particularly acute in the case of my mother. I especially recall the story that she told so graphically of the pain she felt when as a child she had to tell her mother that she had dropped and lost a half crown coin (12.5p) when her father earned no more than £1.50 a week (30 shillings). Her own mother's anguish at this loss was obviously still deeply ingrained in her when she related this story to me as a child. I knew as a result what it meant to live in a household where such a loss meant the difference between having something that week, and not having it, because there were no savings to make good the deficit. My own parents were I think, intensely cautious with money as a consequence. That has rubbed off on me. I don't regret it. It is why I feel what Powell, Bailey and others are doing so intensely, and I will not apologise for that.
I strongly suspect that Michael Parkinson knew that same feeling. I also suspect he never forgot it. So of course he suffered from imposter syndrome. He came from a background of insecurity and understood what it meant in a way that those who come from privilege never can and never will.
Parkinson moved in a world of privilege, but I am not surprised that he never truly felt a part of it.
Nor am I surprised that his son says that to his end he was deeply committed to social justice but that he never have much time for politicians, and most especially those who sought power for its own sake. Quite rightly, he was bemused by then. After all, what is the point of power unless you are going to use it to change the world for the better, which can only be done if you relieve the pain of those who suffer?
That takes me back to Jay Powell and to all those who think they have the right to impose misery on this world, including our current government and, most especially, the Labour Party, which has committed itself to central bank independence and the consequent rule of privilege whilst also endorsing the whole idea that lives must be sacrificed to economic theory for which no justification is known.
I will never understand those central bankers who think they have the right to impose the pain that their policies will create.
Likewise, I will never understand politicians who will give such people power when they know the human cost of doing so.
Both these things are beyond my comprehension, as is the possibility that someone who claims to be concerned for human well-being might seek power without ever seeking to use it to relieve human suffering, which is what it seems to me the Labour Party is now doing.
I do not know why I got the opportunity to say such things. I remain continually surprised that people take note of them. I will never, however, doubt that it is my purpose to do so even though I was born to parents who told me that my security depended upon my keeping my head down and never discussing either politics or religion because that was the only way in which I might just make it through life without too much difficulty given the background that I had.
I chose not to believe them. My experiences of inequality too early in life, starting from the moment when I was offered a place at a grammar school and my twin brother was not, made it clear to me that being silent was never, eventually, going to be an option for me.
But do I suffer from impostor syndrome despite that? Of course I do. Who would not when seeking to speak truth to power when your whole upbringing was amongst people who never thought they had any or the right to it?
That role and that syndrome can create a lonely place. I am sure Michael Parkinson knew that.
I am, however, very glad that Michael Parkinson overcame his fear and succeeded. I am equally pleased that his son has spoken as he has. He was right to do so.
Meanwhile, my disquiet at the behaviour of central bankers will continue until such time as they change, economic theory changes, inflation targets change, or they are removed from their positions of privilege. Those things are what social justice requires, and it is our job to demand social justice in any way we can because unless we do, those with power will continue to treat us with disdain, and that is totally unacceptable.
In summary, we have to overcome our fear. It's the only way to create change. But that does not mean it's easy.
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It sounds like the world has gotten better compared to when a good day was avoiding pit accidents and a wash in a tub.
Really – when thousands are homeless, many living on the streets with not even a tin bath, and many thousands are now working in a gig economy with all the insecurity that that brings The fact that houses are now built with internal bathrooms is surely not the only measure of poverty / insecurity. And with the tin bath in places like mining communities has also gone the loss of community.
It is not the only measure.
But let’s not dispute that it is a measure.
Interesting, and welcome personal sidelights on your usual subjects Richard. I remember being in the tin bath, my Dad bringing in buckets of water to heat in the ‘copper’ for it; I remember the house with its one tap – the cold tap over the kitchen sink – and I am surely one of the few English people of my generation that remembers the ‘night cart’ coming round, to empty the outside toilets – and later, the ‘entry’ dug up for our flush toilet (still outside, still no bathroom).
What has always struck me about this 1960s working-class childhood though is that almost everything that really mattered – water, sewerage, electricity, healthcare, school, library, travel – and almost every real improvement – was provided by the state, or ‘the co-op’ (food and clothes) – which was also my Dad’s employer. The private business world was pretty peripheral to my early childhood. Now I live in France, where 57% of the economy is still in the public sector, and over 10% more is socially owned in other ways (co-ops, etc) – and where if you ask any French person with any experience to recommend the best provider (where there’s a choice) – say between the state-owned broadband provider Orange, or a private sector competitor like SFR – almost all will say ‘Orange’. And don’t get me started on the mess the private sector – post 1980s – has made of UK water, sewerage, electricity, telecoms, housing, education, travel, etc…
Thanks
This is what I wrote to accompany my sharing of your post on Facebook …
‘I would encourage all to read this moving and challenging essay by Richard Murphy. Theology is my ‘bag’, and what Richard writes, though not theologically referenced, is stuffed full of exactly that … Richard writes about the denial of human flourishing, with which comes disregard of the gift of creation … Isaiah 61 is a good starting place …’
Thanks Peter.
Thanks for expressing this Richard. It resonates. My mother, an intelligent woman, would often talk of being selected to go to grammar school but her parents, my grandparents were unable to afford it. So she went into domestic service until my parents married in 1948. She carried deep regret and a burning anger with all injustice for the rest of her life.
My father, who also grew up in poverty, was much happier with life. He “knew his place” and accepted it; a strength and a weakness.
I was part of the fortunate generation that was able to go on to university, the first in the family, with a grant and no fees.
The feeling of not really belonging in professional ranks, particularly while in the UK, never really leaves you. Only by living and working overseas was I able to escape this to some extent.
Your reflections resonate. Many thanks for articulating how the circumstances of early life, good and bad, stay with you.
Best
David
Thanks David
Once again what you say resonates. I think those sorts of experiences do influence us to act in the world to try to improve things. I have met them in the political world as well as the other sort.
My father left when I was five and we left Jersey to live with my grandmother. We had a decent bungalow ( my grandfather rose from an ordinary police constable to a Chief Inspector in Hong Kong. His absent example was to study and learn ) but had little income. It was a more genteel poverty than I saw with friends who lived in Council houses.
Mum had to care for her mother and was now, I realise, clinically depressed for much of the time. I left a secondary modern at 16, my brother making sure I could take the O levels (leaving age was 15 then) and I was accepted at a Teacher Training College on O levels alone. I was the only of my age without A levels. I later got an OU degree.
But I know all too well the insecurity and constant anxiety of small income.
And I want to back up your second point. Fear is the basis of so much that makes people unhappy and under perform. The fear of not being good enough, of what others might say, and of looking inside ones self. The latter is the core of counselling. But learning how we came to be the way we are -and what we can do to change if necessary or come to terms with things is – quote you ‘it does not mean it is easy.’ But when people find the courage -and we all have more than we think- then things can be achieved that we never imagined could happen.
Thanks Ian
It has to be clearly said that if you fail to understand how money is created and needs to be used then you will forever be the victim of “Mickey Mouse” cults be they political party cults or academic economist ones. Here’s the definition of “Mickey Mouse” again:-
https://www.urbandictionary.com/define.php?term=mickey%20mouse
The definition I take from it is “amateurishly having no true value or merit”.
Cults of course happen because individuals yearn to be valued because it’s part of our core consciousness that human beings improve their well-being by extensively cooperating with each other and this has given us planetary domination.
The worst thing that could happen to you as a member of a hunter-gatherer tribe was to be ostracised (not valued). With money coming along to help improve that cooperation it came as a double-edged sword, fail to understand how it works and you become vulnerable to the narcissists and sociopaths who always exist in human societies.
The only solution to avoiding money being used to exploit others is of course education in how money works. Until the UK has a political party or better parties that offer that education you can be sure you’re voting for a Mickey Mouse cult.
Don’t believe in the human cooperation idea and prefer the Neo-Darwinist Selfish Gene trope for your core philosophy of life then try this:-
https://www.researchgate.net/publication/247759661_Evolution_of_Parental_Caregiving
Once again I feel compelled to thank you for writing something so clearly that resonates with me.
I too am incredulous at the lack of political will to fight these injustices and the game of sweeping them under linguistic carpets.
I too was brought up with a ‘keep your head down’ order and in my case I did until now. Commentators like you help me express what bubbles beneath.
I was also brought up to be extremely cautious with money and see the inequalities everywhere which rankles daily. You help me see the nature of these injustices and the structures that feed them.
Please keep banging these drums and we will keep listening and spreading the word.
Thanks Howard
I too read Parkinson’s obit’ with a lot of self-consciousness as the only lad from a working class household who went to university albeit as a mature student of 29.
I too have felt a ‘lack’ – lack of security, opportunity etc., – due to my own circumstances – a family riven asunder by redundancy due to asset stripping. We never got on our feet properly again, and there were quite a few crises over the years – and no going with my friends on school trips abroad etc., despite doing well at school.
But, we were never hungry, we did not need to go to a foodbank, but all our clothes were mostly second hand. Priorities were got right, and my parents kept their self-owned house over our heads until they paid it off but it was all about work in our household, to keep what money there was was coming in we the kids worked too.
I took a huge risk going back to education at 29 – one that paid off. The first year – an access course – straightened me out and got me prepped for the degree I eventually did. I passed with a 1st honours class honours – the first to do so at my university from an access course apparently.
But during the course, there were times when I had a piece of work that I thought had found me out for the imposter I was and I had to contemplate failing. So, I had to get all Nietzsche-like, and look into the pit of my potential downfall and seriously contemplate it. After that, somehow I always pulled through.
But there was and still is a feeling that I’m just not good enough really. It’s always there – nagging at you. Even in my present job for which I have not been trained, I just never fell confident to go somewhere else or call myself a ‘professional person’.
To be honest, even coming here I feel a bit of fake but suppose that is why I can usually relate back to the human costs of what we discuss, not always understanding the technicalities.
One of the things I’m critical of the middleclass professionals around me is how selfish they are with their knowledge? Not all – but a great many are no good at mentoring. They realise that their knowledge is important at getting them the pay and lifestyle they have and too many guard it. It’s their competitive advantage and boy, do they know it. With my own young staff now I have the opportunity to pass on what I know in a way I was not – that gives me a lot of satisfaction and a feeling of putting something right.
But there is still to me at least a huge divide between people of my background and other middle class professionals whose idea/assumption of being a professional is that you ‘should know’ – there is no interest in learning – that you can still learn seems to be is a sign of weakness.
The most telling statement from Parkinson’s son though was that his father (for all his own fame) made ‘other people look good’.
How tragic I thought, but also how typically English, a working class man making his social betters look good. I mean, there’s the British class war right there isn’t it? Working class people’s input in industry and national life, enhancing the fame and fortune of the rich and famous.
Thanks PSR
Here’s the core of the game that’s been played by Labour Party leaderships for nearly sixty years – The working class has nowhere else to go!
“New Labour took the existing core of the party’s working-class votes for granted because, according to Mandelson, they had ‘nowhere else to go’, while seeking additional support from big business by offering them a low-tax, low-regulation economy. Mandelson was involved in the worst excesses of New Labour, and had to resign twice from cabinet because of murky relations with businessmen.”
https://tribunemag.co.uk/2021/05/mandelsons-return-puts-corporate-lobbying-at-the-heart-of-starmers-labour
Mandleson now of course along with Blair is a key adviser to Starmer. It remains to be seen whether the SNP will be a spanner in the works for their ambition to seize power or indeed sufficient of the electorate recognise the right-wing Trojan horse game they’re playing. If Corbyn had one central weakness (amongst other ones) it was failing to recognise that the Labour Party wasn’t a broad church! Play the argument not the person was a Corbyn central belief ignoring the fact there were Labour MP’s who were wolves in sheeps’ clothing!
This has so much reasonance for me both in terms of social justice and class based entitlement/confidence. My parents both came from working class backgrounds, my father escaped via scholarships and a place at Fitzwilliam House Cambridge (not then a full college)in the 1930’s, my mother left school at 14. When I was young my father was a teacher, my mother at home with 4 children and money was short. Each month I would help my mother sort the housekeeping money into a tin box with many compartments – electricity, gas, groceries, school dinners, holidays, Christmas, rates etc – I always knew that there was nothing extra. My mother was an expert at make do and mend and practically everything was re-purposed or re-cycled and often second hand. She was a model of sustainability. My father was a passionate advocate of comprehensive education and ended up a head teacher of one such school. Both were passionate about social justice and Labour party supporters. I had the advantages of a free university place and also ended up working in education, mainly in areas of considerable deprivation. For the last 30 years I’ve lived in Cambridge and have had various groups of friends, there is one group in particular where I feel a real gulf of confidence and it took me sometime to realise that they had all been to private/public scools and, often in good ways, they have a confidence to make things happen in a way I would couldn’t presume to do. Even my daughter who went to the local , but prestigious, sixth form college was intimidated by the confidence of the many public school students who went there, despite her father being a university lecturer and myself being a teacher. The social divide is as great as ever. My dad always maintained that his biggest regret was that the postwar Labour government didn’t abolish private education.
I am often shocked by how little real understanding of poverty many people I know have, and have always felt rather queasy/angry about both the proliferating consumption of the credit boom, and almost continuous erosion of public finance since the late 1980’s.
I’m very lucky in that I have a modest, but comfortable life but am deeply upset about ….. well, the list is long! And, I’m sure like many people who read this blog, I have felt increasingly powerless and uncertain as to where to put my energies and anger to fight the many injustices I see.
One reason I have read this blog on a daily basis since first coming across you at the Cambridge literary festival (The Joy of Tax) is because you are so solution focused, you offer arguments I wouln’t have been able to make, being rather economically illiterate, for things that I was sure should be happening. I’m so grateful for the work you do but sometimes it makes me even more frustrated when those in power don’t take it on board. I recommend yor blog as widely as possible. I wish I could do more.
Thank you
I’m a Barnsley boy born and bred and an ex miner , aren’t we all ?
It’s extremely difficult to explain what were once mining communities and how they shaped you , I’ll give it a go none the less .
Solidarity and looking out for one another was baked in to mining , you relied on the man next to you to save your life every single day you went down the pit .
Not only that miners lived in the same streets , drank in the same pubs and clubs , the women all had the same worries for their husband’s and their kids all played together .
Almost everything revolved around mining and this created a community spirit and togetherness that we will never see again .
Little wonder Parky found it difficult when he moved to an entirely different world , a world where you trusted the man next to you with your life to even in those days a cut throat world .
There was nobody with Parky’s background more suited to interview some of the most famous people in the world , he was never in awe of them because in the world Michael came from nobody was anything special compared to miners and the job they did and he was able to interview these people on a level footing and as a consequence they opened up to him .
A remarkable man who thought he wasn’t remarkable at all because his background told him that solidarity and community are not individual traits they are a collective .
That women may well have destroyed mining but she never destroyed folk like me or thousands of others who worked in mining and are still around today .
Thanks
I’ve become a aware that my post above was probably more reminiscent of Monty Python’s ‘Four Yorkshiremen’ sketch than looking at the significant issues about interest rates, so I thought I’d pop back.
I got Stephanie Kelton’s sub stack on Powell and the Fed last night which ended with a question:
‘Who in their right mind wouldn’t prefer an economy with 3.5 percent unemployment and 3 percent inflation to a collapse in the housing market and a full-blown recession?’. So in the spirit of trying to answer that question:
My view is that all we are seeing from Jackson Hole and that other hole – the Bank of England – is hegemony – the hegemony of capital in action.
And what they are doing is what they always do – re-writing recent history. It’s not just those nasty soviet communists who do that you know!! Power abuses power – everywhere. In the West too. Oh yes!
To hear Powell and Bailey speak, there had been no 2008 credit crunch or anything like that that made it necessary to have low interest rates (although I also remember that these were not always passed on) in order to recover the world economy from the catastrophic private sector banking criminality and stupidity.
No, that criminality and stupidity got a jubilee denied to everyone else. Everyone else got austerity.
Oh no – its ordinary people’s fault that low interests rates have caused inflation because we’ve buying too much stuff. And why not throw in Covid for good measure – something else that affected the recovery and was probably made interest rate reduction more necessary. And even business gets a kick in the groin – it’s voluntarily putting up wages to get things done and its bridging loans as part of the business cycle are now going to be more expensive because of base rates going up.
None of this matters to the master of the universe, the rentiers, the lenders, the rich.
Because they win both ways. If there is another crash, they’ll get bailed out – but that might be a bad look this time if the finger points at them again. So what they’d rather have a return to is ‘steady-state’ rentierism, with higher interest rates, making sure that it is society getting blamed for ‘exuberance’ instead and it us/we who are out of control.
The thing is though, we know that some of the checks and balance put in after 2008 have already been unwound in the U.S. and the U.K. so there is also more risk coming back on the scene as well. There is less control in the finance sector.
It’s an explosive combination.
These people either do not know what they are doing; are wedded unthinkingly to things like 2%; are just not working together – effectively competing over the spoils or what they can get now or we are being prepped for yet another huge transfer of wealth and assets to a small group of people.
We have to understand that there is a robotic like machinery evident in all sorts of extremism – and the fiance extremists in our financial institutions just do not know when to stop – they will never know that they have enough.
God knows what they are measuring themselves against.
As I say being monetarily illiterate and economic and political cults go together. Ordinary working people will better value themselves and be more selective in which economists they believe and who they vote for when they are monetarily literate.
Another fine post. Regarding the banksters, the opening lines of Roxy Music’s “The In Crowd” spring to mind:
I’m in with the “in” crowd
I go where the “in” crowd goes
I’m in with the “in” crowd
And i know what the “in” crowd knows
Powelll, Baileyt et al will never apologise, “they know what the in crowd knows” (and only that). I suppose one could chracterise what they do as “just following orders”.
The recent post on the NHS noted that the boards of NHS “trusts” are self selecting, ditto central banks, ditto the top of the Catholic Church. They are all self-sustaining systems, & designed (by being self selecting) to resist change. Varoufakis in his book “Adults in the Room” profiled a meeting with Larry Summers (page 7) – which was all about “insiders & outsiders”, with Summers making it clear that if you want to be an insider one has to conform to group think.
Which leaves the open question – how to change the current imbecilic – lets-not-think system.
If schools were genuinely about education then facing and overcoming fear would be taught in them. Instead, it’s cultivated, which ought to tell us all we need to know about what’s supposedly ‘our’ society.
Central Bankers seem to be able to detach themselves from the consequences of their actions on the lives of real people – by saying .this is the only tool we have been given’.
‘Not me guv’.
Another lesson from your blog, is to be prepared to transcend the terms of the debate over and beyond what most media including BBC seem content to accept. Bankers dont really get asked about whether the job losses , income losses are worth it to achieve teh magic 2% inflation.
In my experience, realising that not all authority figures – including junior and grammar school teachers and University post-graduate supervisors actually have the best interests of their students as their first priority, can never be learned too early. Then you have to challenge.
I wonder how much of the damage that Austerity has wrought on this Country will be transmitted to a generation yet to come?
The damage to future generations will be a mixture of this undercover theft, and the catastrophes of climate change, and despoilation of nature.
I don’t expect it will be easy to tease out the direct causes or the specific perpetrators.
I was struck by this: https://indi.ca/its-too-late-baby/.. Corporations as the original AI with their prime directive eating up the planet.
I have thought that for a while, never seen it written so well.
In spite of my sorry state of mind I do appreciate what you are doing Richard. You and Ann Pettifor are good sources of education for me…..
Thank you.
Ann is an old friend….
Thanks for an interesting ever relevant article and wonderful recollections!
I too remember the weekly tin bath ceremony and my father, after his last in order bath, using the summer bath water to water the vegetables.
Also remember that he never had an unbroken night’s sleep because of the nightmares resulting from his being one of the first soldiers to enter the Bergen-Belsen concentration camp.
I also remember his army boots and parts of his army uniform in which he gardened.
Might the more efficient and benign post W. W. 2 socio-economic improvements have been due, at least in part, to the greater social cohesion of the directly employed and the “deep state’s” awareness that so many trained and battle-fit soldiers, sailors and airmen had recently been demobbed?
Nicholas Monserrat who wrote the Cruel Sea, also wrote ‘Three Corvettes’ which was a collection of his jottings during his service. He was an officer -war time commission because he was a yachtsman before the war. His later writings -e.g.the Tribe that lost its Head – i recall some quite conservative views.
At the end of Three Corvettes he writes about discussions in the ward room (officer’s mess) about what they might do after the war. To quote unless we do something ‘there WILL be millions of unemployed , Medals pawned, Welsh miners in the gutters of London: there will be barrel-organs with men as the flea bitted monkeys in attendance.
A blue print of the future already exists -the one we used last time,
An army does not fight the breadth of Africa and then allow itself to be sold down the river.
It does not demand money as the mainspring, this new world but it will certainly require generosity and understanding and continued service too. It will need, most important of all, a social conscience working continuously all across the social scale.
With a few blind spots, the war had produced evidence of all these things, in abundance. If we can arry them over to peace time, we have high hopes of the future.”
It didn’t come to that. I suggest because there was a new analysis of the economics of growth -J M Keynes and a plan -Nationalisation and the Beveridge report.
The armed forces voted separately in 1945 and when counted, it showed they voted for change.
This blog and the comments by Schofield, Pilgrim and others argue for a new understanding and as Judith B said today , is solution focused.
What you do is so valuable.
Thanks
I haven’t the words or skills that many others of your followers have, but I recognise greatness when I see it. You are a great man Richard and this country needs more of your kind. I’m 75 now and although not brought up in abject poverty my parents certainly knew the meaning and importance of money and instilled it on both my brother and I.
If only we had politicians that thought like you and understood how their actions affected people’s lives.
I hope for all of us that you achieve your purpose in life and awaken in those in power, their responsibilities to all of us less fortunate than themselves.
It’s kind of you to say so, but I have to disagree. I am just a person who tries.
A pal of mine says that you’re wrong completely posted this on facebook, what would your reply be? I doubt if he would debate with you online.
“Pinning low inflation has been the cornerstone for prosperity. It encourages companies to borrow. Preserves the wealth in real terms of anyone who has money. And gives the population certainty over spending patterns.”
Tell me what is low inflation?
Tell me why 4% is not.
Tell me why 2% is.
Show me the prosperity that was created during the 2010s.
Mike Haigh
Your pal is peddling bullshit. His words show the paucity of the thinking he has adopted. All these below sound like reasonable propositions but what he and so many of his kind do not grasp is that the primary method used to achieve them – interest rates – is a blunt instrument imposed on the population and causes trauma. Lets deconstruct this utter crap shall we:
‘Pinning low inflation has been the cornerstone for prosperity’ – Yes – for the rich and lenders – if you are paying down loans and mortgages agreed at previously lower rates how does that make you prosperous when these loans become more expensive? It’s obvious that only those who have made those loans benefit. Come on!?
‘It encourages companies to borrow.’ – Only low interests rates encourage businesses to borrow. ‘Low’ do you understand? For example, did you know that the country’s housing associations had just handed hundreds of millions of pounds of social housing grant back to the government because they could not afford the loans they were going to take out for new development (social housing grant might pay only 50% max of development costs because the rest has to be borrowed from private banks). And they raised rates Mike when they know there is an affordable housing demand crises!!!! What incompetence!! What insouciance!
‘Preserves the wealth in real terms of anyone who has money.’ – Ha! And whom might that be? And extra 4% on any average savings is nothing really. And savings by households are at an all time low (paying off more expensive loans – yeah?) if I remember correctly. But an extra 4% on those with loads of money is another matter. And the rate rise don’t just ‘preserve the value money’ – they will tend to increase it for those with big reserves anyway – lenders and the rich.
‘And gives the population certainty over spending patterns.’ – Really? So the incremental changes brought in as rises create certainty do they? I’d be quaking in my boots with a mortgage waiting for that prat Bailey to tell us what he was going to do next? And this certainty your mate speaks of is the certainty of spending less in other areas to pay down debt. Essential or discretionary.
And if you spend less, because everyone wages is someone else’s income, there is a knock on effect that could be inflationary as the market seeks to squeeze more out of each fewer transactions.
This last point shows again total ignorance of the reality and impact of just using interest rate rises. If you have less to spend in other areas as a result of servicing higher interest rates, you are still dealing with inflation – price rises. Here the torture being meted out to households is intense and cruel.
On top of that we are seeing just how sticky inflation is – how persistent it is. And why is that? Because interest rates are not the right tool. Interest rates were not even the problem in the first place. The problem was a war in the East and domestically, BREXIT and the cack-handed recovery from Covid.
And let’s not forget nearly 14 long years of austerity either. And interest rate rises do exactly what austerity does and are part of the austerity cook book except that the lenders get most of the benefit – not the economy. Yet look at how badly austerity has affected output? Many businesses want to get on with their businesses so they are hiring and offering higher but still below inflation rate wage rises.
It is not consumer/worker spending power that is fueling inflation. It is BREXIT; it is trying to squeeze more out of every sale; it is the war in the East and it is also private greed and profiteering facilitated by poor regulatory arrangements, lack of investment in infrastructure coming back with a vengeance and a lack of intelligent intervention by a government to look after the people in its care because it just thinks that this is all ‘market forces’ and its totally natural and there is nothing it can do.
And that final point- just like interest rates rise – is total bollocks from our government. The Tories have got to go – we’ve reached new levels of incompetence in the way this country is managed.
Thanks PSR
I am on low levels of energy today
I grew up in the USA, in the 1950s and 60s, where the term Mickey Mouse was applied, usually to things that were universally easy—no matter what your skills and talents might be—and presented little or no challenge to acquire or pass.
A Mickey Mouse class at high school or university was one that didn’t require much effort or excellence—but counted towards graduation anyway.
I suppose you could apply the term “Mickey Mouse” to medals people ‘win’ simply because they participate in an activity. They get a medal, even if they come in last. (This wasn’t happening when I still lived there, but has since become a ‘thing,’ so I understand.)
Stuff like this. In other words, you walk away with some reward or qualification, but don’t need to put out much effort to get it.
For us, the overall meaning of the term implied by Mickey Mouse was ‘easy,’ more than just ‘worthless’ or ‘fake.’
@ Jan Foley
I’ve lived in both the US and UK and politics in both countries has been deliberately subverted by vested interests to seem easy or “Mickey Mouse” when in fact it isn’t.
We are a dominant species on this planet because of our prosociality and this can only exist through social control (which anthropologists call “reverse dominance”)’ With the advent of money our species has largely failed to recognise that to maintain that social control we need to understand how it’s created and how it needs to be used!
Here is a classic example of what happens if we fail to recognise the link between social control and understanding money. It concerns the current Labour Party:-
https://tribunemag.co.uk/2021/05/mandelsons-return-puts-corporate-lobbying-at-the-heart-of-starmers-labour
Here are two papers explaining the importance of social control to foster prosociality and why prosociality helps enormously to deal with the chance contingency of life:-
https://www.pnas.org/doi/epdf/10.1073/pnas.2218222120
Note two key quotes from this paper:-
“… —even the origin of life as highly cooperative molecular reactions—is a product of higher-level selection.” Page 2.
“To summarize our progress so far, we are a highly prosocial species, thanks largely to our capacity for social control.” Page 3.
This second paper deals in more detail with the topic of social control being exercised through reverse dominance:-
https://www.robkhenderson.com/p/reverse-dominance-hierarchies
In a nutshell in today’s age “If you don’t understand money you will undermine prosociality!”
i remember giving a similar description of my “tin bath” memories to an email group only to be reminded of the 4 Yorkshiremen sketch in early pre python tv in which all are made fun of by competing with their memories of being poor.
It became obvious that those popular satirists where hoping to put to bed the unpleasant facts which, not having experienced it they prefered not to discuss.
Thanks for all your thoughts and posts. Your blog is the first item I open each morning.
I live in Finistère, Brittany and am lucky enough after selling my cycling holiday business in the south of France to buy my house with a distant sea view outright. However our only income is 2 UK state pensions and two very small teacher pensions. We survive but with no real luxuries. My wife and I would love to return to the UK where our children and grandchildren are but we simply could not afford to live near them. Everything I read and learn, watch etc just brings me to the conclusion that the UK is becoming a third world country with a failed state.
I’m not sure that even winning the lottery would entice me back. I’d move the family over here!
[…] Overcoming fear Funding the Future. “Fire and fear, good servants, bad lords.” –Ursula LeGuin, The Left Hand of Darkness […]
Capitalism has always been about transferring assets to the upper class. Both inflation and the alleged means of fighting it — higher interest rates further that enterprise. And the central banks and owners of resources — including the rest of us or labour as was pointed out by George Carlin) — have the power to impose liabilities on the rest of us to accomplish that task.
And then we waste time whinging and wringing our hands about inequality. Seems clear that inequality is accomplished by continually transferring a$$ets from working classes to our owners.
My grandmother had to leave school at 14yo in the 1940s to go to work after her father and then her stepfather both died in WWII. She was brilliant, and she worked her way up to the highest position available to a woman at the time by retirement.
She always wondered what could have been: what if she’d been able to stay in school? She only talked to me about it twice, when I got into MIT and a few days after I moved to Boston to start my studies there, but the longing she expressed has stuck with me for almost 30 years. (She died the next year.)
My Dad says she mentioned it to him when he went to uni (first in the family), and again when he started his PhD. She only brought it up to him again in her 70s, when she started to look back at her life. I wish she’d gotten her chance too, but I know how fiercely proud she was of my Dad, and then of me.
She voted Tory back then (she died in 1995), although she refused to vote for Thatcher, apparently. If she could see the UK now she’d be apoplectic.
Thanks
Richard, I too shared your blog and that of Peter Davies on facebook,
I am so conscious that in the last 13 years we have created so much fear for so many.
We now have fear of homelessness, people are one paycheck away from their financial world caving in, fear of sickness the underfunding of the nhs means that it takes forever to be seen and be treated especially if you have a long term ailment eg long covid and other crippling diseases. This plus the fear of poverty with millions being pushed into the situation that they cannot afford the basics means we are impoverishing our nation and the world. We can be better than this, it’s my prayer not my hope as I too am fearful of what the next government will bring.