CRASH2: Neoliberalism, murderer of inflation, commits suicide by deflation.

Tuesday, December 16, 2014
By Paul Martin

BY JOHN WARD
Hat4uk.wordpress.com
DECEMBER 16, 2014

How devious geopolitics and dead-end globalism combined to eat the world economy

You have to hand it to the neoliberal fraternity – perhaps I should say patriarchy – there’s never been a belief system in history capable of breaking all its own rules one by one, and still trying to tell us it’s the best socio-economic development system on the planet.

The world’s Milt-milkers have variously demanded to be nationalised, expected to be saved, opposed any and all reform, used austerity as a form of stimulation, tried Zirp as a means of increasing spending power in a recession, produced endless monopolies of media, banking and energy, used the biggest Government market interventions of all time, and then produced the slump to end all global slumps.

I’ve read most of Friedman’s stuff, and leaving aside for a second its narrow academic inability to take real people into account, I really don’t remember any of the above features being present in his work. However, one thing he did like was the idea of conquering chronic inflation; so whatever else one wants to throw at the neolibs, this you have to grant them: they have indeed wiped out inflation.

Imagine my surprise, therefore, when around five years ago 0% inflation suddenly became a spawn of the Devil. Yes – believe it or not, and frankly it’s an unavoidable conclusion – those who used Milton Friedman as their guiding light for so many years have even decided that this tenet of the Messiah’s gospel is also a false witness. (Or to use the other excuse, “Milt would never have recommended doing this”).

What we have today – and the virus is spreading fast – is deflation. So today I’d like to ignore all the other drivel that MF spewed out over three decades of abject failure in the real world, and focus single-minded on that.

Why did inflation suddenly swap places with deflation as the Great Global Bogeyman?

The answer is threeofold: politicians spending beyond their means, greedy bankers trading with each other beyond human understanding, and bourse-demanded growth insisting on consumer credit.

The Rest…HERE

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