This is the same Murphmonster who tells us that wages must rise, is it?

US economist Adam Posen has an article I recommend reading in the FT this morning (and you can read 30 articles a month, free). The headlines say enough to summarise the argument:

posen

First, there is an army of hidden jobless people, many of them supposedly self employed.

Second, this is massively damaging in multitudinous ways, from mental well being, to sustainability, to old fashioned growth if that’s what you want.

Third, inflation is much less worrying – unless you’re very wealthy.

And that’s what economic debate on rate rises is about now. It’s pretty much down to class struggle – wealth versus the rest. Maybe it was ever thus.

So, which should we be doing? Leaving wages be and low so that all of the unemployed are priced back into work? Or working to raise wages so that more people become unemployed? Which is it Murph?

At least pricing everyone back into work then works: for once we’ve full employment then wages will quite naturally rise……

7 comments on “This is the same Murphmonster who tells us that wages must rise, is it?

  1. “Third, inflation is much less worrying – unless you’re very wealthy.”

    Really? What if you are quite poor, and necessities take up most of your income? What if you can’t muscle your way to increasing that income to at least match inflation? You won’t be worried?

  2. Ah, but he develops the theme in the reply to a comment:

    “Ti the vast majority with wealth inflation is of great interest
    They own debt
    Debt is educed in value by inflation
    That is why inflation is deemed a ‘bad thing’
    Of course there are exceptions – but this is the rule”
    (All spelling, grammar, punctuation and syntax between the quotation marks are from the original).

  3. This is the same Mr Murphy who wants inflation to rise so as to wipe out debt but at the same time complains about the cost of living crisis and real wages falling.

  4. I get it, Andrew. It’s wealthy people who don’t have a wide choice of investments, so they, or their bankster minions can’t try to ensure that there is a net return above inflation.

    Where as poor people who, if they have any money to invest, get guaranteed above inflation returns from Courageous State bonds and pension scheme. Which, in turn, invest in those Courageous State projects which can’t get funding from the rich bastards and banksters because they are socially productive as well as financially rewarding.

    Because, as we all know, rich bastards and banksters will always turn down a guaranteed high return investment if it smells, even of the slightest, of improving the lives of normal people.

  5. His constant insistence that words mean what he says they mean, wilful denial of settled theory, and mutually-contradictory nonsense like the above are part and parcel of the same underlying problem: if your philosophy is based solely on exigency then it is bound to be incoherent and intellectually flimsy. I vacillate between two explanations of Murphy’s writings: that he’s a slimy, unscrupulous mountebank who will say anything to advance his revolting agenda or that he is deeply, grotesquely, unfathomably stupid. A third possibility arises, of course. He may be a charlatan and a cretin.

  6. Which demonstrates his economic ignorance. The wealthy invest in “real” assets* while those just above the breadline put “money for a rainy day” (or savings towards a car or deposit on a house/flat) on deposit with a bank or building society. So the latter suffer far more from inflation than the the former.
    *The FTSE WMA “Stock Market Balanced” portfolio has less than one-quarter in fixed interest and cash; add in the house (or houses) and commercial property investments and the proportion of the wealth in cash and fixed interest drops to around 10%

  7. I remember a couple of years back he said that his desire for inflation was based on the assumption that workers pay would keep up with inflation, due to the active involvement of the union movement.

    Funny that, more work for his paymasters..

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