Never confuse visibility with credibility.
And so it comes to pass. Another day, another burst of nonsense from Ross Gittins. The more things change, the more consistently Gittins is wrong.
For readers out there who may not be familiar with the dark and dismal art of economics, the first clue that someone knows not of what they speak is when they attribute inflation to increased corporate profits.
The second clue is when speaking of inflation, not a word is mention about money supply and monetary policy.
Please step up to the mic Mr Gittins:
When you’re seeking to manage the economy through its ups and downs, it’s critically important to diagnose its problems correctly.
Doofus. The role of the RBA is not to “manage the economy”. Its roll is price stability and employment even though I think the employment objective is incorrect. It has no mandate on productivity, economic growth, climate change, education, and especially not to manage the economy.
According to Gittins, who quoted the Brookings Institute:
The vast majority of the COVID-19 inflation surge is accounted for by supply-linked factors, especially a rise in company [profit] margins that followed severe delivery delays at the height of the pandemic. Demand-linked factors, notably indicators of labour market overheating, play almost no role.
This is Australia Institute, Australian Greens nonsense. It is also utter clap trap. The “supply-linked factors” were the money supply and the massive flood of money from the US Federal Reserve and all the other central banks like the RBA.
Don’t believe me? Look at the data:
Gee. When did inflation kick off?
But that’s just the US you say. What about Australia.
Hmmm.
As Uncle Milty said and proved:
But on the other hand, economic nonsense is espoused by many and most usually by Ross Gittins.
Buffoon!