after five successive months of decreases in UK employment levels, commentators are swift to blame Rachel Reeves' employers' national insurance hike.
But this certainty is it ignores two other key factors;
a. (as I keep noting) this is the express aim of over two years of BoE/MPC interest rate policy on inflation & depressing wage inflation;
b. the widely reported & growing impact of AI on employment.
Reeves (despite her faults) is not the key architect of job losses!
In the midst of a cost-of-living crisis, they are worried about wage inflation.
That would dearly love to force monetary policy to measure the economy in terms of affordability metrics for different parts of the population.
The problem is too much economic consolidation. That’s where inflation comes from.
@GhostOnTheHalfShell @ChrisMayLA6 It doesn't. There's no amount of money you can put in the hands of people who are so rich they can't spend it, and create inflation. It's impossible.
@ApostateEnglishman @ChrisMayLA6
Not when they use private equity to buy a companies, asset strip them and then load the loan obligation they undertook to buy the victim business at inflated prices.
The rich don’t spend their net worth on anything. they use it as a collateral for loans where they fob off the loan onto what victim they can.
Oligarchy is monopoly and monopsony. One side can be said to drive inflation and the other wage suppression.
This its the cost of living crisis.
@GhostOnTheHalfShell @ChrisMayLA6 Inflationary pressures arise when there's too many currency units chasing too few goods and services. That's when businesses start raising prices by a few pence here and there, because it profits them. The net effect is inflation. It's a response to increased aggregate demand (more people buying more stuff). You can't add to aggregate demand by making the rich richer, because they couldn't spend all their money *before* they got richer. Nothing changes.
@ApostateEnglishman @ChrisMayLA6
That is the mainstream theory, but its assumptions are so short of reality, that it is fallacy of omission.
Inflation comes from those who can raise prices. Austerity comes from those who cannot.
Which is to say that if a large company decides to raise prices, the consequences cascade throughout the economy, and those that can raise prices will, and those who can’t inflict austerity by cutting back somewhere else.
https://economicsfromthetopdown.com/2022/12/15/inflation-everywhere-and-always-differential/
@ApostateEnglishman @GhostOnTheHalfShell
indeed, which is why Keynes referred to 'effective demand'....
@ChrisMayLA6 @GhostOnTheHalfShell It's about differential spending constraints. Keynes was on the nail here. It's also why quantitative easing (QE) isn't real fiscal spending; what, you thought the banks were going to put that into the economy? Did we all miss the fact that hoarding is their MO? How did we get here in the first place?
@ApostateEnglishman @ChrisMayLA6
The wealthy are affecting the market in different ways largely through monopolization (economic consolidation).
Private equity has purchased a significant amount of housing stock in certain regions. They force the price up significantly.
In the US, there are two major national food, chains Kroger and Albertsons.
@GhostOnTheHalfShell @ChrisMayLA6 Okay, we don't disagree. So it's a question of who has the deficits, and that's a political question (read the alt-text). 👇
