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How Venezuelan is he going to get?

The last point is important. Shortages don’t increase costs and so push up prices. Shortages provide the opportunity for exploitation by profiteering, which pushes up prices. So what we have is profit-driven inflation – a new phenomenon.

26 thoughts on “How Venezuelan is he going to get?”

  1. But they also encourage others to leap in and produce more, which drives the prices down again. Unless you ban fracking so they can’t do it, of course.

    I was needless to say entertained by an article in Nikkei about the wicked Russkies and their wickeder customers evading the sanctions. Oh the horror!!

  2. Well, he’s not entirely wrong. Shortages is a meaningless word unless one specifies what there’s a shortage of. There’s a shortage of elephants in my roof garden. It’s not something that’s troubling me greatly. So the rest of what he’s saying is correctly meaningless.

  3. Harry Haddock's Ghost

    If he’s now at the point of ignoring GCSE level economics, his tenure as even a pretend professor has to be over.

  4. Sortages are the result of the absence of opportunities to make profits by selling the (items of which there are shortages).

    So Murphy has got it utterly wrong, as usual.

  5. The post is so absurd overall that it requires a complete debunking – am out and about now but suffice it to say his post appears to be based on two assumptions – that the U.K. economy has almost no external trade and also that the only trade that matters is with the EU. He also appears under the impression that income
    Distribution stopped some Time prior to the Second World War. I’m certainly considering a letter to the institutions that employ him as he is frankly masquerading as a professor under false pretences – that that post would lead to being chastised if it came from
    A first year undergraduate.

  6. How can one man be so consistently wrong? It’s amazing.

    My nine year old knows that if a kid at school has one lollipop, and she wants it and so do 19 of her mates, then the price of the fucking lollipop is going to be higher than if the other kid has 20 lollipops and only one customer.

    Likewise, she would expect the kid with one lollipop (in the first scenario) to be badgering the shopkeeper, and by extension the wholesaler, and the manufacturer, to get more lollipops asap.

    In the second scenario, we’ve got too many fucking lollipops if anything, so no resources will be wasted in producing more. Unless the government mandates it, of course.

    Richard Murphy is a genuine cunt.

  7. He should sort the current petrol price crisis by buying fucktons of oil on the open market before it gets to those price gouging oil companies, and the selling it at cost price at his own chain of garages. That’d show’em .

  8. It’s dr Strangelove as usual. Despite the effort to disguise it, Murphy can’t hide that really he just should be able to tell you what to buy, and at what price

    As previous commentators have so aptly put into words. Cunt

  9. Richard Murphy is a genuine cunt.

    A genuine cunt is attractive and useful to many. Murphy not so much.

  10. As a logical part of Murphinomics I blame the customers. When there is over supply of a product they should pay top price for it and not buy at a discount from the poor supplier who is struggling to make a profit.

  11. Stagflation assumes a continuing situation where wage growth exceeds growth in available goods and services on which income can be spent, pulling prices up.

    There are some in the UK for whom this wage growth is happening. Let’s call them the wealthy. They can pay all the prices now being demanded for goods that are in short supply and subject to big price increases, from second-hand cars to heating for the swimming pool.

    Yes Goddamn it – I was scouring the internet for my second hand car and looking for ways to heat the swimming pool. Not sure who else here works for a Fortune 500 or FTSE 100 company but I can’t recall my pay rise being 10% this year. Maybe it’s just me.

    Not sure the stagflation definition passes muster either

  12. “And he advises the SNP on economics…”

    That doesn’t surprise me in the slightest. His form of willful boneheaded ignorance of basic economics is what passes for mainstream thought in Scottish politics… and has been for decades. The number of times I’ve been in a discussion with someone about economic matters round here and been left open-mouthed by some utter bizarro-world statement like the ones Tim quotes here doesn’t bear thinking about. I’m convinced they’re teaching Marx and Lenin in the schools.

  13. So, actually, he’s saying shortages drive up prices.
    He seeks to explain away the observation by describing the mechanism by which prices rise when there’s a shortage.
    He blames it on ‘profiteering’, which is of course Evil and must be crushed.
    But as others have noted, without profits, why would any business do anything?

    It’s almost as if if he simply doesn’t understand….

  14. Dennis, Bullshit Detector

    Shortages don’t increase costs and so push up prices. Shortages provide the opportunity for exploitation by profiteering, which pushes up prices. So what we have is profit-driven inflation – a new phenomenon.

    Just when you think he can’t pack another ounce of shit between his ears, he goes off and says something like this.

  15. If he’s now at the point of ignoring GCSE level economics, his tenure as even a pretend professor has to be over.

    He’s not tenured, he’s just a wibbly wobbly visiting professor. That means they can drop him at a moment’s notice, just like City did (despite his “very likely” high score in REF, lolz).

  16. Bloke in North Dorset

    “ And he advises the SNP on economics…”

    I suspect it’s more like politicians casting around for someone to tell them what they want to hear and him being will to make up any old crap to get in the political limelight.

  17. Others are managing price rises by dipping into their savings, which is going to happen a lot over the coming months, and even years. But for many, these savings will run out. This means of maintaining a lifestyle in the face of inflation is only available to some, and is finite.

    For a majority of households, with average incomes (or less) and few savings, the current inflation means reduced standards of living. The amount consumed will fall, as is already becoming apparent in GDP figures, and this crisis has hardly begun as yet.

    My point is that excepting the case of the well off (who are the only people most economists and politicians know) there is no wage surplus indicating people have the excess income required to support sustained rising prices in the UK. And in that case we can’t have stagflation.

    Why are people ‘dipping into savings’? I’ve got plans to confiscate those to pay for my boondoogles. It’s unacceptable that these people might be spending money in ways that are ‘unapproved’

    Additionally the Uk operates rather like North Korea so we can’t buy goods from abroad and demand for commodities isn’t global.

    Also people aren’t in a position to be able to borrow money or get a credit card to fund consumption.

    I don’t think I’ve seen a GCSE student with such a fundamental lack of basic economic understanding – it’s truly mind blowing. He and Danny B are about as close to The Mile End Road as beings from Jupiter. Just truly staggeringly inept.

  18. The mindset is: it is better to control prices and endure the shortages than it is to permit someone to make excess profits for some period of time until supply starts to approach some sort of equilibrium with demand. Are not long queues a sign of a more equal society?

  19. That’s especially true when the other condition for stagflation, which is that a workforce able to secure above-average pay increases, doesn’t exist, except in a few professions. So, again, the claims are wrong. Because accountants are doing well right now does not prove all are.

    There’s a huge number of vacancies across almost every sector in the economy. Sectors like transport and warehousing are reporting significant salary rises or jobs not being filled. It’s true that the picture is complex but even in my current industry (financial services) there is significant wage inflation across the board. Very skill dependent but to say it’s limited to the professional classes is simply wrong.

    The inflation we have is something quite different. It’s not driven by excess money or wages in the economy. We have inflation caused by Covid supply chain disruption, and workforce disruption as older people refuse to work in unsafe conditions on unsafe terms.

    It isn’t driven by excess money? We lobbed in hundreds of millions for people to be paid to do nothing and that had no impact? With interest rates at 0.1% people were piling it up in savings accountS? Is he really that dim? As to the second point – which line of argument are you taking Murphy; are old people so destitute they are facing starvation? or can they afford to stay at home not working because a disease with a 99.8% survival rate creates an ‘unsafe environment’?

    We also have inflation caused by the disruption and chaos of Brexit, which we alone are suffering. In addition we are suffering the fallout from war. Energy and food prices are high for reasons entirely beyond our control. We could also suffer inflation because of climate change.

    I don’t think the shambles that is Brexit is helping (more on that later) but I’d say it’s a relatively minor factor next to Net Zero and COVID lockdowns (no mention of either) – Energy prices are directly related to the idiotic price cap and the failure to invest in fracking. This also feeds into food prices. Climate Change at this point needs to be parked and anyone mentioning it can be safely ignored

  20. Bloke in North Dorset

    “ Shortages don’t increase costs and so push up prices. ”

    Spud identifies another area to show off his ignorance.

    If a refinery designed to refine x barrels of oil an hour only refines .75x, or whatever, it’s unit costs go up. Ditto a factory making X widgets.

    Then there’s the logistics, ships geared up to carry X containers, if they can even get containers or ships, see their unit costs go up. Same goes for distribution companies.

  21. “Pelosi pushing Biden to introduce price controls because of inflation and shortages”

    The USA seems dead set on turning fiction into reality……Atlas Shrugged anyone, with a side salad of 1984?

  22. @Jim

    1984 plus Brave New World – You Will Be Happy… …or else

    I am not a number, I am a free man

    It’s my belief Biden admin is stoking anger to provoke riots and insurection, then impose martial law and nationalisation

    – Southern border open millions from all over word flooding in

    – Inflation,oil shortages, food shortages, over $56 bn sent to Ukraine

    – Now baby formula extreme shortages And tons of baby formula shipped to border for illegals – no shortage for them. Plus, import from UK/EU banned and any trying on Amazon, ebay etc find it confiscated

  23. The Pedant-General

    “I’m convinced they’re teaching Marx and Lenin in the schools.”

    I’m afraid you’re rather wide of the mark there. It would be an improvement if they were actually to teach _anything_ in schools in Scotland….

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