Basic, blooming economics: Don't you get it?

From the Chancellor to the journalists at the BBC, Sky, the Telegraph et al does anyone actually understand basic economics these days? Our societal leaders are serving us up with merde pie, says the irrepressible Godfrey Bloom

Godfrey Bloom and his latest book
Godfrey Bloom
On 7 December 2014 13:52

It has been a source of constant amazement to me after 35 years in the City and ten in politics how few people understand money. I do not mean the scatter brained amongst us who squander it on cars, booze or handbags. I am talking about what it is for? Why do we use it, how do we abuse it.

I hear politicians and journalists bandy jargon and buzz words they clearly do not understand. Let me explain; most of us half listen to the news, vaguely picking up bits and pieces here and there as we quietly go about our lives of quiet desperation.

If you are a butcher, baker, doctor, bricklayer, chef you might know some of this; if you are an economics graduate from a state university it will be completely new. We hear plenty about GDP: the government gets excited when it goes up; it allows them to pretend all is well; the economy is on track, we are being successful, there is light at the end of the tunnel'.

We heard much of this in the Autumn statement. It is, of course all nonsense. GDP is a measure of national monetary transactions, it goes up, it goes down. It is no measure of wealth or economic well being. My old euro constituency Yorkshire and North Lincolnshire could increase its GDP by 2 percent easily in 2015 by adopting the following plan. 

Dig a massive hole in the Yorkshire Wolds, I mean monster, move the spoil by truck over the Humber Bridge and build a huge mountain in Lincolnshire. Diesel sales would shoot up, truck companies would prosper, transport cafes would enjoy a bonanza as would the road menders and health and safety boys. The activity would awe the rest of the country. Yet no real wealth has been created.

We still have Keynsian economists who think the problems are lack of demand in western economies. This fallacy is injected into their minds at state universities where  the lecturers are paid by the tax payer; in short , on the take from the wealth creating class. Re enforced by stockbrokers, bankers and investment houses who make profits from easy money because they are at the front of the queue when central banks dish it out.

The most successful period of UK history is the industrial revolution. It came about with virtually no government interference; sound money based on gold, which could not be stolen or degraded by politicians for short term electoral advantage. A loaf of bread was the same price in 1816 as 1895: that's price stability in spades.

I have long advocated a system of guest interviewer on state TV, someone trained to ask questions with rapier precision, not the bullying bluster of ignorant pseudo celebrity front men supported by fresh faced children researchers.

The chancellor would not last 5 minutes with me ,or my Mises Institute colleagues, yet I watch in despair as the TV anchormen tackle the post Autumn budget in much the same way as would Ron Burgundy.

This administration has printed £350 billion and increased the national debt by 50 percent, yet GDP has only grown by a measly 2.5 percentfrankly pathetic. 50 percent of this GDP is spent by the government who printed ,borrowed or stole it from taxpayers to start with. Anyone getting a sense of irony? So the upside should at least be hospitals and schools as good as Sweden; our roads as good as Germany. Well, of course, they are not are they?

Similarly, our police and army should be the envy of the world. Our standard of living should be rising. If we are so successful why has the standard of living for ordinary folk stagnated for 10 years? Why do great swathes of the UK suffer from 30 percent youth unemployment?

Moreover, who is going to repay all this debt: £1 trillion including public pensions and funding initiatives. Indeed, can you  conceive what £1 billion is never mind £1 trillion?

When we are told inflation is only 2 percent what do they mean? Of what does CPI or the old RPI consist? White goods, flat TV screens, mobile phones, computers. The average family worries about food, house prices, booze, fags, petrol, diesel, college fees; 2 percent my arse , they must think we're really stupid.

The problem is the reporters from the Daily Telegraph, the BBC , Sky TV  don't live in our world. They seem oblivious to old age pensioners and their struggle with crap annuity rates, unaffordable  'planet saving ' electricity, rocketing travel costs, children who will never afford their own homes.

Inflation is rampant for those who want to see it , mainly in asset prices. It is the middle class who are the nouveau pauvre yet they are, in the main ,the wealth creators, not just here but in all the industrial economies.

When I was a youngster inflation was the demon it is now for the citizen. Inflation just means higher prices so why is it being encouraged? It is the only way politicians and their central bank partners in crime can bail themselves out. Totally degrade fiat currency and pay off the debt in toy money.

Everyone loses except those on indexed linked salaries and pensions, in other words politicians ,civil servants  and the boys at the bank.

Some particularly moronic economic commentators are now arguing oil is getting too cheap. Hands up everyone who wants more expensive petrol? Where does the money come from for all these freeloaders? You guessed it, they borrow or print it  and tax the wealth creating sector.

Anyone else getting a feeling of déjà vu?

Godfrey Bloom is a former UKIP MEP. He is a member of the Mises Institute, Resident Author for Libertarian Alliance, and popular speaker on the international economic circuit. His recent book is A Dinosaur's Guide to Libertarianism

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