Fiona Bruce
Jo Stiglitz
“It’s not often you get a Nobel Prize winner on your program“
– Fiona Bruce crowed to her Question Time audience in Cambridge on Thursday, it’s not often you get a Joseph Stiglitz putting a top UK Treasury minister down quite so effectively.
The context; the audience asks
“what steps can the Government take to reduce the cost of living crisis?”
Bim Afolami claims the Government has brought the inflation rate down
Bim Afolami
Stiglitz responds,
“you didn’t bring inflation down, the market did”.
Queue applause and laughter from everyone but Bim.
The put down was so sharp and accurate that it reminded us that the Conservative’s ideology is based around “market economics” – nice one Jo.
Let’s be clear, people haven’t got rich on a recent pay-rise. If they have had one , it is probably a catch up on 15 years of price rise suppression. Inflation may have fallen but interest rates haven’t, those on floating rate mortgages have the same pain as they have had since the 2022 debt crisis sent rates through the roof, as Stiglitz pointed out, those who are coming off fixed rates are coming onto massive mortgage payment hikes.
And on staples, the things that send people to food-banks or worse, prices are still rising and hurting. Household bills, fuel bills and food bills are still hurting those most vulnerable to inflation. So Stiglitz is right on two counts, Government has not brought the inflation rate down (something they can’t control) but they haven’t provided the safety net for the poor to cope, austerity is still hurting.
Anyone who thinks that a fall in the rise of inflation means crisis over, is kidding themselves. Poor people are still poor and those with debt are still paying over the top to service that debt to suit the plans of the Bank of England. As Stiglitz says, we need to get wages up by increasing the bargaining power of workers and by increasing productivity through more public investment. Public investment is more than pension investment , there are hard choices “within the budget” but Stiglitz makes it clear that Labour’s plans aren’t enough.
The local election results only underline the 99% certainty that we will have a Labour Government, let’s hope that Labour will break the lack of election promises and actually do something about driving up wages through driving up productivity. Incidentally, pensions can do a lot to help and higher wages do a lot to help our pensions.
Bim has got a lot of praise on this blog for statements he has made about loosening the regulatory torniquet that is stopping the circulation of money into the real economy (abandoning the quietest graveyard). He tells us that he wants to see steps taken by regulators to encourage innovation, I hope that TPR’s latest statement on innovation will appease him, I hope that TPR’s market practice will be in line with its statement.
Jo, me , Andy and Peter
As a much younger man, I went to a conference set up by the Bank of Iceland to look at pension issues around the world. Attending and speaking were Jo Stiglitz, Peter Orzag, Andy Young me and a lot of other people.
We went skidoo-ing at the end – out on a glacier, Peter and Jo went on one skidoo, Andy and I went on another, Peter and Jo crashed and Jo had to be stretchered off and made a famous speech in New York later that week on crutches. The rest of us ate smoked puffin in a mountain hut. That is my best dinner party story, but I share it here because I don’t go to dinner parties. I am going to the Great Escape with Andy Young in a couple of weeks time.
Peter’s brother Mike is known to those who love pension economics (I think he got me the Iceland gig) , he still works for WTW, Peter went on to be budget director for Obama when he was in the White House and became a famous shagger
I look forward to looking at the click-through count on that link!
It’s people that make for great debate
Fiona Bruce was right, Stiglitz made for a great question time and his quip will be remembered long after we forget the Government’s plan for regulatory improvements.
If I was Bim, I’d cross the floor of the house though that’s about as easy as swapping Eton for Windsor Boys.
This started out as a serious blog and has degenerated , thanks to Andy Young’s mischievous mails.
I wish all concerned a great weekend and if anyone thinks I consider myself worth the toe-shavings of any of these great men, they don’t know me!