Tuesday, July 15, 2008
I Have Nothing To Offer But Pain
It's just as well we don't expect anything useful from our politicos. Here we are falling over the cliff edge, and all Darling can suggest is that we keep very still. Yes, the cost of living is soaring back to the 70s, but nobody should even think about taking evasive action, like demanding higher pay.
Inflation is back. True, 3.8% is not disastrous by 70s standards, but it's the highest for 16 years and nobody seriously thinks that's the end. For one thing, wages will surely follow, and for another, the Fed has already cranked up the Big Printing Press. As for the Bank of England, if they were serious about their 2% inflation target they'd have increased interest rates already (see the excellent Alice for 24/7 commentary from a beady-eyed inflation hawk).
Meanwhile, on the other side of the street, Dave has warned us that his government may increase taxes. Spending growth has apparently already been trimmed by Gordo as much as it sensibly can be. So if tax revenues disappoint, then tax rates will have to be increased. QED.
Is he trying to wind us up? Probably. A man who's twenty points ahead in the polls and cruising, hardly needs to worry about the views of his party members. But compare and contrast with last October. Then he was facing imminent electoral defeat and turned things round with, yes, a tax cut.
So. It may be our money they're spending, but when the going gets tough, as per, we're completely on our own.
Hope you can fly.