Over the past few months, he persists with an argument about inflation, the dangers of inflation. Basically, Elite's tend to have large stock piles of other peoples cash in their bank accounts, and in an inflation environment, with low interest rates - they worry. And so these libertarian-conservatives like to argue that inflation is very evil, and that it should be smashed into next century by raising interest rates. Being the root of all evil, economically, inflation to them is worth sacrificing growth and millions of jobs.
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I wrote in response to his latest blog post:
The Bank of England has been utterly and consistently wrong on inflation: stupidity or dishonesty?
Daniel Hannan has been utterly and consistently wrong on inflation
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Inflation is being driven by a correction the value of £, increased purchasing parity with the rest of the world and a failiure of our domestic manufacturing to meet demand.
Domestic manufacturing will expand, and will ideally expand fast under cheap finance. Only when manufacturing can take over from imports, will inflation become stable.
The monetarist dogma that leads people to fight inflation in this case is to DENY INFLATION.
it is as though, hannan continues to believe, despite being told otherwise, that you can deny inflationary forces by slapping on interest rates. This is victorian medicine, and does not take account of the actual problem.
We just have to accept that our economic policy of the past 30 years, has failed. And that inflation is inevitable until domestic production rises.
The absurd policy response which Hannan continues to advocate would act to suppress growth in new manufacturing by making finance more expensive, this would keep britain in the doldrums when britain needs to grow aggressively.
