Cost of living crisis
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When I lived in a Belgium a law was still in force fixing a maximum price for bread. The boulangeries complied for a basic loaf but concentrated on producing and selling fancy breads at a higher price. I would think this would happen again if this was introduced in other countries. The law was only abolished in 2004.
There was a president in the Caribbean who was a right winger and two times by governmental decree he fixed prices for all commodities including the price of gasoline
Some US economists are proposing a price control over the commodities
Mick Lynch critiques the BBC
Listen to the radio interview
Military personnel covering public sector strikes over the Christmas period are to be paid daily bonuses of tax-free £20.
There was talk not so long ago of British capitalism going cash-free, all monetary transactions going digital(?) If it did this that would see the end of inflation. After all, given that inflation is an excess issue of inconvertible notes and coins, if there were no notes and coins to issue excessively, it follows there would be no inflation.
Interesting question, but why could not more digital money be made available by the central bank than needed by the economy?
A few years ago Sky News’s economics editor Ed Conway did advocate a cashless society as a way of trying to control consumer spending.
Yippee! Received another £67 towards my most recent monthly electricity bill which will help to pay for my flight to Austria for the ‘hols’.
Don’t worry guys – I’ll be back in the New Year.
Frohe Weihnachten! xxx
Too stupid to offer an intelligent answer to ALB’s question.Just don’t know.
There is negligible use of cash in Sweden and they expect to go completely cashless by 2023, but the inflation rate last November was 11.5 per cent.Figure that one out.Some marvelous skiing in Austria. Lizzie (who weighs eighteen stone) could be hurtling down the Arlberg, the Lech or the St Anto. If you are a beginner Liz can I just wish you what all we actors wish one another on opening night – break a leg.
A third of the global economy will be in recession this year, Kristalina Georgieva, the head of the International Monetary Fund (IMF) has warned.
https://www.bbc.com/news/business-64142662
“Even countries that are not in recession, it would feel like recession for hundreds of millions of people,” she added.
Another new word
“richsession”An expected recession in the US will hit the richest Americans harder than those at the bottom, the Wall Street Journal said this week, coining the term “richcession” to describe it.
In this context, a “richsession” would make a big difference from the “usual pattern, in which the poorest are first to suffer”, noted David Philippy, a historian specialising in US economic thought at CY Cergy Paris University.
At the bottom of the wealth divide, things are looking up, surprisingly. This is because the labour market is in a “relatively healthy state for unskilled workers looking for jobs”, said Tobias Broer, an economist at the Paris School of Economics.
“White-collar workers bear brunt of downturn,” proclaimed a Washington Post headline in late December. 80,000 tech employees had been laid off by the end of November. Amazon said on January 4 that it plans to shed 18,000 workers this year.
Another factor draining the wallets of wealthy Americans. For Wall Street, 2022 was the worst year since 2008: the S&P 500 – an index of 500 top US companies – fell by 20 percent. Tech companies were some of the worst-affected stocks on the index.
Martial Dupaigne, an economist at the Toulouse School of Economics and Paul-Valéry University in Montpellier said,
“…If there is no bounce back, this current plunge in valuations could wipe out very large sums for well-off investors in these companies,”However, Pierre Gervais, an expert on US economic history at the Sorbonne Nouvelle University, explained,
Wall Street Journal article “doesn’t really hold water, because the whole article is aimed at contrasting the situation for middle and upper management with the situation for unskilled workers, while neither group is really rich”, Gervais said. “By contrast, the super-rich aren’t affected by the economic turmoil.”
Philippy agreed. The WSJ article “doesn’t really concern the super-rich in the US, whose income comes mainly from capital” and who are little affected by layoffs or by a temporary drop in the stock market,
Citizens Advice has called for a ban on energy companies “forcing” customers onto prepayment meters because they are struggling to pay bills.
https://www.bbc.com/news/business-64235997
The charity estimates that 600,000 people were put onto the pay-as-you-go method last year, with 160,000 more expected by the end of the winter.
Citizens Advice estimates that 3.2 million people across Britain ran out of credit on their prepayment meter last year, the equivalent of one every 10 seconds. The advisory service said it saw more people who were unable to top up their prepayment meter in 2022 than in the whole of the last 10 years combined.
The Fire Brigades Union has won an improved offer through the threat of strike action. Which confirms the view that the best strikes are the ones that don’t take need to take place.
https://www.fbu.org.uk/news/2023/02/10/fbu-leadership-recommends-acceptance-revised-pay-offer
Strikes are a trial of strength to test what the market for a particular kind of labour-power will bear. In this instance both sides have worked out what this is without the need to test it.
I suspect that the RMT are holding out for the employers to drop the strings attached before they accept the pay part of the deal on offer.
The government is obviously going to have to back down over the nurses. Fancy the “Royal” College of Nursing being forced into industrial action. This could be what their patron, King Charles, is hinting at their weekly meetings that his Prime Minister does.
Price controls in inflation hit Argentina
In the poor neighborhoods of Buenos Aires, where the inhabitants often lack even the basic means of life such as safe drinking water, Argentina’s persistent inflation problem is wreaking havoc on livelihoods.
Padre “Paco” Oliveira, a Catholic priest who caters to the needs of the poor, thinks the government price curbs do not go far enough. “A fair price is an agreement with companies so that they do not increase the prices of certain products beyond the agreed level. But that is far from enough. People must receive wages that are above inflation,” he told DW.
https://www.dw.com/en/argentinas-rampant-inflation-will-price-caps-work/a-64696859
Lars-Andre Richter is observing the experiment for Germany’s liberal Friedrich Naumann Foundation in Buenos Aires. The price controls are problematic, he says, because of their “market-distorting effect.”
“In Argentina, the government wants to counter inflation. That’s like trying to dam a raging river with a few pebbles,” he told DW. “Officially, the blame for the high inflation rate is being placed on the producers and their allegedly speculative tendencies. That is a clear distortion of the facts.”
Instead, Richter blames government money printing for high inflation, as the central bank is printing pesos “virtually around the clock.Agustin Etchebarne from Libertad y Progreso (Freedom and Progress), a nonprofit public policy research center, is also critical of the government measures. He argues that the price controls cannot work.
“If a price is set below the free market price, you distort the signals and ask producers to produce less and consumers to consume more,” he told DW, adding that this would lead to “shortages and empty supermarket shelves.”
Once prices are freed again, he fears that those which go up the most will, of course, be “the ones that were controlled.” As a result, Etchebarne expects that the fair price strategy will fail, like many other such attempts that have been undertaken “all over the world in the last 4,000 years.”
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