Can someone parse this for me?

So why then, I asked, do we insist on running the economy at a low temperature (which is the equivalent of the inflation target) and without real use of the hob (otherwise called fiscal policy), with rules enforced by a technical committee with remarkably little real world experience between them (the Bank of England’s Monetary Policy Committee), and all because the government think the economy must serve the interests of a few (the wealthy who want low inflation, and who eat overdone roast beef) at cost to the rest of society who now know the real food potential of the country is enormous, and utterly constrained by rules that make no sense?

No, leave the absurd food metaphor out of it.

Why do the wealthy want low inflation?

If you’ve assets then inflation is just fine. It’s the poorer people on fixed incomes who hate inflation.

Why can’t he get even the basics right?

16 thoughts on “Can someone parse this for me?”

  1. If you’ve assets then inflation is just fine. It’s the poorer people on fixed incomes who hate inflation.

    Not just those on fixed incomes. If your assets are financial assets such as deposits and cash – rather than tangible (eg property) or those providing high returns – you also hate inflation, at least inflation outstripping interest rates.

    And it is wealthier people who are more likely to have net financial assets rather than net financial liabilities / debt.

  2. So Much For Subtlety

    Rich people need low inflation to protect the value of those big piles of money they have in their bedrooms that they just roll around in. Laughing maniacally all the time.

    Or so I have been led to believe.

  3. This stupidity is actually dangerous. I would say that wealthy people are relatively indifferent to inflation and people with mortgages quite like inflation as long as their incomes keep pace. People on fixed incomes, of course, hate inflation. So different people with different wealth levels, incomes and liabilities all have different attitudes to inflation.

    However, this era of very low interest rates is building asset prices to absurd levels. The housing market is a case in point, where mortgages are on a multiple of 6 or more times earnings. If rates rise, there will be Carneyge in the housing market. Low interest rates also make pension schemes uneconomic – in this environment, most people cannot save enough for retirement and it is almost impossible for a definition benefit scheme to be solvent.

    Any change to the cooker has to be very cautious. Murph is not the chef for that. Don’t ask Jamie either. I’d opt for Ray Mears myself

  4. in other news, 1 more company with the FTM hauls itself onto the list. The first accountants, none the less, who make great claims about being good accountants having a fair tax mark, etc.

    Shame their website says:

    “However, at the same time as helping you increase profits (and the amount of tax you pay) we want to keep the percentage of tax as low as possible.

    We have developed a comprehensive tax planning approach which covers everything from the basics to advance tax planning.”

    Anyway, with 6 months to go, only 8-9 FTMs to give out a week to meet the target on the business plan (so far the rate is 1 per 6 weeks).

  5. The food metaphors may indeed be absurd, but somehow I expect them to reappear in his next book, due I think in Nov, in time to fill that gap in the stocking that Santa will leave.

    As an avid reader of Murphy’s books, perhaps VP will be kind enough to let us know in due course

  6. Noel

    You’re being terribly unfair. Crunchers is clearly a company of enormous importance. It’s sole director (Damion Viney) is listed as ‘unemployed’ and an ‘accounting technician’ on Companies House and the accounts filed at Companies House (abbreviated) show whopping net assets of £729. The accounts are unaudited but I’m sure the FTM people will have done a thorough review of this prestigious company.

  7. Pingback: Crunchers and the Fair Tax Mark | Tim Worstall

  8. BF – I will be receiving loud and clear!

    As for the analogy – it’s beyond ludicrous, but for him ‘Civil Society’ is an undifferentiated mass of people who need the help of the ‘Curajus State’ never mind that inflation has different impacts on different people in those brackets. He no doubt thinks unlimited ‘People’s QE’ will be the panacea for all the ills caused by low inflation (even though inflation is at the moment fairly low according to official figures, underlying inflation could explode with very little warning)

  9. @Andrew C

    I’m am embarrassed to say I didn’t think to go further to Companies House, but in mitigation I have to say I didn’t think the FTM was getting *that* desperate to give some out!

    Holy shit.

  10. Arf:

    “Although I am a qualified accountant (MAAT), I learned most about business from founding and running a charity for many years.

    “The charity generated over £1m in revenue and whilst it was a not for profit it operated very like any other small business and taught me many lessons. There were ups and downs so I can empathise with business owners.”

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