June 23, 2022

Central banks are more keen on it as corporations will not invest in new productive capacity and governments around the world are uninterested in getting involved.

The only answer that we have now is recession. I agree with Armstrong from the FT:

The Fed, alas, cannot create new sources of supply or unclog supply chains. It only controls monetary policy, which slows inflation by reducing demand, and therefore growth.

Having looked dumb relying on supply before, it doesn’t want to wait for problems that it can’t control to get fixed.

The problem with leaving the economy to actors like the privatized central banks is that you cannot vote them out of office. So, there is no action that they can take that results in a review of the way they see the world.

The tone is going to get more desperate as prices continue to go up for things that are in short supply. Stagnant supply of shipping containers, micro chips, raw materials, oil, gas, transport, and food continue to drive prices for all goods. In addition, we have a reckoning in money value as the bubble that is the financial world collapses.

In addition to this, we have an over-supply of discretionary goods being stored that no one really wants or can buy. In capitalist consumer-reliant economies of the West, companies have to sell and so mark these down and/or reduce purchasing. This reduces the prospects of profitability of those consumer-facing companies as well as the companies that make those goods.

So, there is no ability or desire to invest in production of things we need and no need to invest in things we do not need. This is leading to a slow-down in economic activity at the same time of price increases of both.

The question we always ask is "who is going to pay the price for all this?" The answer is fairly clear: workers. This is a political choice and for governments—on the centre left and the right—there is no answer that involves them taking any real action.

I am by no means a real economist, I just play one on Zoom calls. But, understanding inflation, value, money, and the history of profitability is not that hard. Economics is a field nowhere near as complex to understand as chemistry, biology, or physics.

And, describing what is going on in the economy, the political economy history that got us here, and alternatives is even easier to outline.

The question we all should have for the CBC and other news agencies with a mandate to drive public understand is why they have no one in their ranks willing to explain even the politics of inflation to us?

The argument over what is causing price increases flows incoherently around monopoly, supply, demand, workers wages, profit, or magical elves in the mystical place called the "Fed".

The answers are clear to anyone interested in learning about these things. The more you know, however, the more you want to scream at the TV.

And, just when you thought that you had a handle on things, we are now talking about recession as if it is a word without grounding, without consequences, without a solution. As if it is inevitable.

The left's political existence is based on the fact that our understanding of economics says recession is neither natural nor inevitable and that the consequences are neither out of our hands nor inevitably bad for workers and their families.

So, where are the left voices saying this? Where is the political program that outlines the clear and grounded response. Where is the direct critique of capitalism?

It is this economic system of capitalism that creates recessions, over-production of junk and the underproduction of needed goods. It is capitalism that drove people into poverty, increased prices out of reach of those same poverty struck families, and has once again denied dignity to those who simply want to live well enough.

This is the most wealthy time in the history of the world where production—even in the height of recession and war—could solve human needs.

How is it that we have found ourselves without a voice, without standing, without even a horse in the race?