Mark Blyth
speaker
294 appearances
3 recordings
3 series
first heard Aug 2024
last heard 3 Jul
Mark Blyth’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 1 in all, peaking in Jul 2026 with 1.
Appearances
what they do is they all start becoming consumers. They start buying stuff with their wages, right? You see where this is going, right?
Big failed harvests, wheat harvests, Canada, the United States, USSR, as it was at that point in time. Global commodity prices start going up. 1973, in response to the Middle East war, OPEC jacks up oil prices from $4 a barrel to $16 a barrel. Given how oil dependent the US and all the other economies are at that point, we're all big manufacturing economies. This is what we call a supply shock.
somebody took supply off the market.
So if you think about it, what actually happened was rather than people's expectations of prices getting unhinged, not really what's going on, it was a decade in which you got all of these supply shocks. Everyone just got up one morning and went, oh, things are getting more expensive. Slam. Shit, things are getting even more expensive. Slam. Can we stop getting slammed, please?
What seems to be the most common cause is we just get hit with all these supply shocks randomly. And then each of them have an inflationary impulse. Each of them die.
By the time that Volcker came in and made the price of borrowing incredibly expensive, the damn thing was nearly half over. He caused the recession that he didn't need to.
Time to check your bank accounts. The first of the stimulus payments started to appear in accounts over the weekend, and this is just the first.
The first one is the government spends too much money. It's Biden. It's the stimulus, right? All those stimulus checks. You had bros investing in crypto. Everyone's sitting at home, like, playing Xbox. I mean, it's absolutely ridiculous. Blah, blah, blah, right?
But... Problem is, countries that didn't mail out checks had just as much inflation. Oh, interesting. Right? So just let's park that. But it's one story. It's a very powerful story, right?
That's the labor market story we spoke about before. This is Larry Summers. You might remember, he said, we need to have 7% unemployment for two years to cure the inflation, this sort of stuff. And what he's thinking is, OK, this is maybe started by too much government money. But the problem is, you've got a really tight labor market. And people are going to start to expect price increases.
So you're going to get wage increases. And then you're going to get that spiral. And we're back in the 70s. And we know the only way to break that is to push interest rates up. That's what we learned from Paul Volcker, right?
And so they have an expectation that prices will go up. So therefore they need to have more wages to compensate. And you get that kind of two of them pushing up together.
Exactly, which leads us to number three, which is the story about greedy corporations. So the story that then comes out is, yeah, but maybe the government spent too much money. That's your ignition, right? And then maybe people start to say, things are getting too expensive relative to my income. I need a pay rise. Totally reasonable, right?
But then what happens is big corporations, particularly the ones that have a lot of market power, like there's basically two companies that do all the chicken in the United States, this sort of stuff, right? They can absorb those costs and they can pass them on to the consumer to protect their profits. That's why prices rise. We get that. But then they go a little bit further.
Then they actually push on their profit margins.
And then they make super profits. And that's why eggs cost much more than they did. That's why beef cost much more than they did. It's all these concentrated markets. And then they don't push it back down. That's why things don't go back down. So whether that's right or wrong, that's story number three.
Yeah, greedflation. I actually prefer seller's inflation. That's actually the better term for it because it's the people who sell stuff on, right? And then the final one is the one that basically Paul Krugman was banging on about on other people. It's just basically, this is just a big supply shock. COVID was just a supply shock.
All it meant was we couldn't get crap because it was all made in China. That's a supply shock, right?
So add all this together, you've got four very different stories. They're not mutually incompatible, but people tend to believe one rather than the other. Right. And you've got good political motivations behind that, right?
If you're a good, full-fashioned, low-tax Republican, and you think the government spends money on a load of crap and people who don't deserve it, you're probably going to believe the Biden stimulus is behind it. Right. Right? So there are motivated reasons behind this. So these are the four stories that you get.
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