I tweeted this whilst watching Channel 4 News last night:
Kitty Ussher was, always rather surprisingly given how right-wing her views were, a Labour minister until 2010. Since then, she has shown no evidence of that, although I suspect she would fit into the current Labour Party rather well.
What she did last night was make a claim that neither the IMF nor European Central Bank can find any evidence for. Nor can I, given that UK real wages are still declining. That claim is that we are at risk of a wage-price spiral. That is entirely untrue.
What is true is that we are suffering a profit-price spiral. She was in total denial of that.
What she claimed was that because the UK labour market is overheated (which it is not: just ask young people looking for career opportunities) and there is still excess demand in the economy (no doubt true amongst her well-paid friends, but not for the vast majority), we must still crack down on inflation.
These comments were enough to make me angry. They discredit the Institute of Directors because they are obviously not true.
They contradict all evidence, so they discredit Ussher herself.
They demean Channel 4 for asking her on as if she might know what she was talking about.
And they are intended to support the imposition of yet more misery and outright poverty on the millions who are being broken by the failure of the government to act on the consequences of the inflation we have suffered.
As I argued yesterday, we live in a society in dire need of redistribution of income and wealth. The absence of this is not the only reason why nothing is working in the UK. But without the stimulus serious redistribution of income and wealth would bring to the economy and real people's lives we will continue to live without hope in the UK. It is as straightforward as that.
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I have always thought the IoD faintly ridiculous (self-important triflers with lunch-boxes, attending time-wasting conferences); and never, ever thought of joining it when in business.
I always refused to join when. invited, which I was, many times.
Absolutely John. A bunch of Thatcherites, nothing more. Clinging on to their discredited ideology.
I saw her, too. Had to turn it off to avoid spoiling an otherwise pleasant day.
On NewsNight as well. Challenged by Ann Pettifor.
Even Milton Freidman denied that price-wage spiral can ever be a thing. According to Freidman wages sometimes go up because of inflation, never the other way round. It is an outdated concept that even monetarists say is a distortion of reality. To mention it in the public sphere is complete laziness.
“And they are intended to support the imposition of yet more misery and outright poverty”. Spot on. And although it demeans journalism, Channel 4 news is a willing participant as much as any other news channel. If they were interested in facts, they could’ve investigated the situation themselves, as you point out, the data is available. Instead, they invited on a political talking head from a powerful group, who was bound to only ever speak in support of those she speaks on behalf of, however untruthful that may be. Channel 4 news knows this (it’d be staggering if they didn’t) and collude because their interests align with the IoD’s as do the interests of powerful people generally (keeping poor people poor means more for themselves, exactly what this item was about). I stopped watching/listening to mainstream news years ago, I prefer instead to read academic texts and data/factual analysis from those with specific expertise, usually marginal voices, not people who have learned to paraphrase press releases written by PR consultants. The IoD’s playbook is obvious and facile and endlessly repeated by those with power: blame those without power or voice. Every time.
Yes, and Newsnight had Ussher along with another stooge to ram home the wage-price spiral falsehood, which clearly the BBC had understood was the message of the week. In the last hour of the twentyfour they did finally have a dissenting minority voice in Ann Pettifor .
The ‘Lineker review’ needs to suggest the BBC should replace their passive ‘impartial/balance’ remit with a ‘search for truth’. Investigative journalism.
Their journalism shows absolutely no curiousity as to whether there really is or is not money to pay the doctors/nurses etc.
Ann seems to have dione a good job
According to Wikipedia she did PPE at Oxford which explains everything.
So, there is nothing to see here – shall we……er…………move on?
Yes but quite a contrast with another PPE (Oxon) graduate, Grace Blakeley, who has no trouble with being authoritative in these matters in the public sphere!
But she interned for me once!
I doubt there can been many people who have had such a malign influence on the welfare of British state as those tasked with ‘teaching PPE’ at Oxford over the past few decades…
You have said on many occasion that having inflation is not a problem.. well it is and that’s why controlling it is the top priority
In the context of this post what dies that comment mean?
And why is forcing millions into poverty going to solve inflation caused by war in Ukraine?
And what gas your comment got to do with inequality?
Have you read this post from Neil Wilson on interest/price spiral:
https://new-wayland.com/blog/interest-price-spiral/
The Myth
The standard line is this from the Bank of England
“when we raise Bank Rate, banks will usually increase how much they charge on loans and the interest they offer on savings. This tends to discourage businesses from taking out loans to finance investment, and to encourage people to save rather than spend.”
“Overall if loans go down, financial savings must go down by exactly the same amount.
If you want the stock of bank loans to come down, while the stock of bank deposits goes up, then, unfortunately, reality won’t let you do that.”
“As MMT shows the cost of credit is incorporated into the cost of all goods and services. The higher the interest rate, the higher the price.
The Myth recommends pouring fuel on the fire. MMT recommends a permanently zero Bank Rate, and making central bankers, along with their expensive entourage, redundant.”
Question to Richard Murphy: do you support permanent ZIRP?
I do, but not for that reason
I can explain a lot more simply: we need low interest rates because:
a) That encourages investment
b) That reduces inequality
c) With credit controls asset prices are constrained
Done
See Larry Elliott’s excellent article on « Greedflation » 2 days ago. Why doesn’t the BBC invite him to counter the ministerial line on inflation ? Are all of the BBC presenters economically illiterate (especially Faisal Islam who really should know better). No chance. The BBC acts as the government ‘s propaganda arm for aspiring intellectual class. Far worse than the Telegraph because of it’s pretence of impartiality. Knock channel 4 by all means but save the big guns for the BBC