So these are conclusions borne of accepting without question neoliberal foundations.
The false premise here is that central bank action (Ie interest rates) is the only way to tackle inflation. This is false. Interest rates are indiscriminate. Whether you own a mortgage or are a failing business or a successful business, you are impacted to varying degrees.
Increasing interest rates is a form of wealth redistribution to banks.
The alternative to interest rates is taxation. Just enact an 80% corporate income tax rate and redistribute that wealth to the taxpayers most adversely affected by that.
A lot of people like to demonize, for example, oil companies for "price gouging" when the price of oil is set by a global commodities market. If an oil company charged less, someone else would simply profit the difference between the charged price and the market price as a form of arbitrage. The history of price controls as effective long term strategy is not good. Others will also argue oil companies are engaging in price manipulation. That's a longer conversation with some (but honestly not a lot) of merit. But it actually doesn't matter.
Why? Because the solution is to both of these problems is simply taxation.
Opponents might argue that corporations will simply pass that cost on. Won't that simply generate more profits which generate more taxation?
There is a fundamentally adversarial relationship between capital and labor here, which is why neoliberal publications like the Economist talk about depressing wages being a necessity. This is what's lead to almost no aggregate real wage growth in 40 years.
Wealth redistribution to taxpayers essentially hedges the inflation problem but that borders on socialism, which is why it's not part of any serious conversation about inflation.
The false premise here is that central bank action (Ie interest rates) is the only way to tackle inflation. This is false. Interest rates are indiscriminate. Whether you own a mortgage or are a failing business or a successful business, you are impacted to varying degrees.
Increasing interest rates is a form of wealth redistribution to banks.
The alternative to interest rates is taxation. Just enact an 80% corporate income tax rate and redistribute that wealth to the taxpayers most adversely affected by that.
A lot of people like to demonize, for example, oil companies for "price gouging" when the price of oil is set by a global commodities market. If an oil company charged less, someone else would simply profit the difference between the charged price and the market price as a form of arbitrage. The history of price controls as effective long term strategy is not good. Others will also argue oil companies are engaging in price manipulation. That's a longer conversation with some (but honestly not a lot) of merit. But it actually doesn't matter.
Why? Because the solution is to both of these problems is simply taxation.
Opponents might argue that corporations will simply pass that cost on. Won't that simply generate more profits which generate more taxation?
There is a fundamentally adversarial relationship between capital and labor here, which is why neoliberal publications like the Economist talk about depressing wages being a necessity. This is what's lead to almost no aggregate real wage growth in 40 years.
Wealth redistribution to taxpayers essentially hedges the inflation problem but that borders on socialism, which is why it's not part of any serious conversation about inflation.