Cost of living crisis
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Truss has blamed the war in Ukraine for her problems.
How long before she switches to blaming Saudi Arabia?
Was just reading about that myself. More backtracking. It was the obvious thing for a capitalist government to do (most others have). It has even been suggested that the energy companies concerned prefer a temporary windfall tax to signing unfavourable longer-term supply contracts.
Another obvious thing to do, to assuage ‘the markets’, is to cut back government spending on social “benefits” and other reforms. I doubt they will abandon increasing military spending or removing sanctions on Russian oil and gas. So Guns before Heating is the most likely outcome. We will see.
“Another obvious thing to do, to assuage ‘the markets’, is to cut back government spending on social “benefits” and other reforms”
Well, for what it’s worth, Truss says she remains “absolutely” committed to not making public spending cuts.
My understanding is that it is mostly renewables which will be affected but the oil and gas corporations will be exempt from this windfall tax.
As an aside, i note Greta Thunberg is sympathetic to nuclear power with caveats.
“Well, for what it’s worth, Truss says she remains “absolutely” committed to not making public spending cuts.”
Oh yes?
As members know I am no Marxist economics guru so how valid this analysis I came across is for others more informed to determine.
https://www.greenleft.org.au/content/global-inflationary-tsunami-made-us-not-ukraine
Using inflation to mean an increase in consumer price indexes (rather than its original and more helpful meaning if an over-issue of the currency), he is right. The increase in the rate of increase of these indexes did start before the Ukraine war and was attributed mainly to supply problems in the aftermath of the covid epidemic and was expected to slow down and stop when these supply problems were overcome. But the Ukraine war, and the economic war the West declared on Russia has made it worse and longer lasting.
The US has raised its interest rates which has attracted more lenders. This has led to the dollar (which is the main currency in which states now hold their reserves) going up in value compared with other currencies.
The revaluation of the dollar means in effect a devaluation of all other currencies and so makes the imports they have to pay for in dollars (such as oil and gas) more expensive. So the “Global South” is being affected in the way Ross says. But not just them.
Incidentally, he is wrong about Keynes when he writes:
“As John Maynard Keynes explained, it is much easier to cut real wages by high inflation than by directly reducing money wages.”
Keynes did not advocate high inflation but a mild inflation that workers wouldn’t really notice. Obviously workers would recognise a high inflation and react, as they are now.
Just got 66 quid back from Octopus courtesy of the government’s energy bills support scheme.
Yippee!
Mortgage rise crisis
https://www.theguardian.com/money/2022/oct/15/uk-families-mortgage-rising-resolution-foundation
More than five million families could see their annual mortgage payments rise by an average of £5,100 between now and the end of 2024,
Revealed: E.ON tried to get Kwarteng to cut its taxes while bills soared…
Tens of thousands of people have protested in Paris against the high cost of living and for a more decisive fight against climate change
https://www.dw.com/en/france-is-a-new-protest-movement-starting-over-cost-of-living/a-63457388
Millions of people were forced to skip meals or go a whole day without eating in recent months, new data shows.
Triple-locked pension promise to be broken
Truss abandons pledge to raise state pensions in line with inflation.
But still committed to raising defence spending to 3% of national income by 2030.
https://www.bbc.com/news/uk-politics-63303880
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