It’s pretty obvious that anything that needs doing about prices won’t be done. Conventional economics aren’t good at dealing with unscripted problems.
Conventional politics also have no hope of ever managing crises, as you may have noticed for the last couple of decades. It’s just one mistake after another. No issues are ever actually settled and finalized.
In my own very (infuriatingly) conventional country, Australia, we have a classic case of political and economic conventions staying on script where everything else is going way off script. It’s an almost stereotypical case of Western economics at its most timid and inept.
After a catastrophic first quarter of national GDP, the big issue for discussion is “growth”. You don’t say? How does that work in this environment? Particularly when all indicators point to a future of crashing populations? How is “growth” any sort of agenda for anything anymore?
This is very old thinking. There’s no suggestion of the thinking adapting to current problems, either. Economic growth used to be the formula for success, 20-30 years ago. Growth was imprinted on market analyses like a brainwashing exercise. Growth is now practically impossible. The “solution” is to bring in lots more people to pretend that “growth” is still a real thing.
Where exactly these people are going to live and how they’re going to pay for living here is unclear. How they’re going to fit in to a shrinking economy isn’t exactly mapped out, either. What, if they buy enough groceries, the Australian economy kickstarts?
Even more scary amid the ruins, there might be another interest rate rise. That particular piece of information is redundant. Interest rates have almost nothing to do with price gouging except on marginal levels. They’re an inadequate excuse at best, and a lie at worst. The per capita bottom line is meanwhile looking utterly horrendous. Standards of living and quality of life aren’t exactly prospering, and you’re worrying about a few basis points?
Just check out the logic on those links above. See how long it takes to see the built-in contradictions and non-sequiturs. The facts are so obvious, and the interpretations are about as unrealistic as you can get.
During all of this melodrama, one thing isn’t being mentioned at all. These price rises happened at a time of relative prosperity. The pandemic was over. The macro economy wasn’t going broke 3 years ago or even pretending to be going broke.
All of a not-very sudden, there were huge spikes in the bottom line, more or less at the same time.
Nobody questioned “market forces”, as usual. Perish the thought that anyone should ever look at hard data. These price increases were “market farces”. Sure, they were. …Except they weren’t.
In a conventional economy, everyone spends a lot of time telling the world how well they’re doing. So they did, interminably. Then, very profitable businesses started massively upping their prices. Reliable no-fuss cashflow turned into guesswork.
Rentals in the US were already doing this, thanks to massive corporate property holdings. The disease has now spread worldwide.
Nor is the mythology coping too well with the realities. Interest rates have very little to do with properties you already own outright. This wasn’t a crisis of credit, or adjusting to added costs that didn’t exist previously. The pandemic price freeze was just an excuse to charge multiple times pre-pandemic rentals.
Or, put simply and unarguably:
They upped prices largely because they could get away with it.
The general idea seems to be to wait until everything is reasonably, OK, then screw it up as much as possible.
The people doing the gouging were already doing fine, according to themselves. All those billionaires didn’t just sprout out of the plumbing, y’know.
When the price spikes started governments were at a loss. Politically, a herd of gerbils who’ve been preaching deregulation for 50 years didn’t have the authority or the will or the intelligence to simply stop the price rises.
The politicians who will replace the ones who’ve already failed are no better. The thoroughly deserved irony here is that the best political opportunity in decades will go begging. How well would you do in an election if you said you’d make prices come down, and did it?
Fortunately, the tradition of political obliviousness and indecision has prevented any sort of sanity.
The excuses for the price rises are a bit like the massive non-information hype about globalization. Everyone was applauding globalization and making a lot of money.
All was OK until someone decided they didn’t like it for antiquated “reasons” like:
“Globalization takes away jobs!” The jobs were long ago outsourced and long gone.
“We should charge tariffs!” The exact same thing that did so much to cause the Great Depression.
“It’s them immigrants!” What, taking away jobs that no longer existed, ten or twenty years later?
How dumb are you hoping to be?
None of this drivel ever meant a damn thing.
Prices went up. The same trade continues, but it’s just not called globalization anymore. Global trade has been around for thousands of years. It still is and always will be. The entire anti-global hoopla is as ridiculous as ever, and things are much more expensive.
In the case of the current cost of living meltdown, we have this rhapsody of reason:
“The economy will work better if nobody has any money!” This is capitalism at its delirious and idiotic worst.
A little shopping list of issues here:
Nobody is seriously talking about prices ever coming down.
The theory of competitive pricing is nowhere to be seen in the face of what is basically cartel pricing.
No effort whatsoever is being made to force prices down.
There’s no political will to do much if anything about any of it.
The tax-dodging nonentities are likely to get away with it again, at everybody’s expense as usual, and nobody’s talking about that.
Therefore, revenue suffers, and politicians can’t even pretend to offer much with no money.
Therefore, you can’t afford to do whatever you need to do, because the money has already been stolen by the “gouging sector”.
This is true guaranteed future economic suicide. Nobody can afford to have kids due to prices that were already far beyond absurd. Therefore, raising prices and making it that much worse is the next logical step, right, kiddies?
Very overpriced economies historically have no chance of survival. If you look at the histories of economic disasters, prices are very much part of the mix.
You already have two pre-broke generations who can’t even pretend to expect decent lives. Did you have to rob them as well?
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
