Realist, not conformist analysis of the latest financial, business and political news

Seriously Stupid Coronavirus Policy Suggestions

A Richard Murphy

The Sage of Ely has decided to favour us with his ideas about how to entirely screw up the global economy in these times of the coronavirus.

Firstly:

The first of these suggestions is that price controls must be introduced: it must be illegal for anyone to sell any products during the rest of 2020 at a price more than 10% higher than that at which it was available for sale on 29th February this year.

Brent Crude was $50 on that date, thereabouts. So, the global oil price must not rise about $55 at any point this year? Gold was at $1570. So that price rise to $1670 was already verging on the illegal? If the stock market climbs above FTSE100 (admittedly, a little unlikely) then all transactions are illegal?

Yes, you’re right, man’s an idiot.

His response will be but, but, I didn’t mean those things, I meant products. You know, products. To which the response is – what’s a product when it’s at home then? In a detailed enough definition to stand up in a court of law?

Plus, of course, if things become in short supply because no one’s making them then we want prices to rise. So as to reduce demand – hey, use both sides of that toilet paper! – and increase supply.

The justification for this price fixing is:

The risk that there will be shortages giving rise to blackmarket operations, or of straightforward commercial abuse, during the course of the next few months is high. For precisely that reason price controls are necessary with the penalty being the forfeiture of the entire revenue generated by the person breaching this requirement plus a fine of 50% on top of that.

If we don’t have price fixing then it’s not possible for there to be black market operations, is it?

In addition, we are going to require rationing. There is no point pretending otherwise: some goods will, if they are not rationed be unavailable to those who need them, and that has to be wrong. Supermarket attempts at managing supply are already failing: pasta and other products have completely disappeared from shelves, and limiting bags of pasta to five per customer is very clearly an inadequate way of managing demand.

And now the stupidity redoubles. We already have a rationing method – it’s called the price system. And if we don’t fix prices then we don’t need the rationing.

Given that the vast majority of food sales go through the major supermarkets, and the vast majority of customers are habitual in their buying patterns, as well as the outlet that they use, then the easiest way to impose rationing is through the loyalty card schemes that these stores use. For anyone who does not have such a card at present, they can be supplied. Thereafter, controlling the number of items that anyone may buy will be relatively straightforward: purchasing will be impossible without such a card, and rationing will be imposed by it. I am sure that there are some minor technical problems that will need to be overcome,

Gee, ya think? I, for example, have several different cards fro different shops. Even, a few different accounts from the same shop. I get multiple rations, do I? Lucky me. And lucky anyone else who spots this and signs up for new cards, eh?

And the idea that we’re going to impose a rationing system in the next few days is simply absurd in the first place.

Seriously, how did anyone this deluded ever get employed by a British university?

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Spike
Spike
1 year ago

It becomes a lot more obvious that the only purpose of Murphy’s baloney policy recommendations over the years was to develop a need for more Murphies to be put on the public payroll to administer the baloney policies.

Boganboy
Boganboy
1 year ago
Reply to  Spike

I agree. I couldn’t find the bread I like today, so I’ll just wander down to another shop tomorrow. They usually have it available at a higher price.

If the government really thinks it needs to worry about this, it can just increase the dole. But it doesn’t.

Boganboy
Boganboy
1 year ago
Reply to  Boganboy

The bread wasn’t available at the local garage, so I bought it at the shop over in Lunga Street.

It cost about A$0.90 cents more than it did the last time I bought it there. Rationing by price seems to be working.

HJ777
HJ777
1 year ago

He’s an idiot.

Even if his ideas had any merit, he is clearly unaware that supermarkets such as LIDL and ALDI do not have loyalty cards. LIDL happens to be my local supermarket and, under his plans, it would be packed with people buying all their stock without loyalty card restrictions. This means that I wouldn’t be able to buy what I need unless I were to also travel further to other supermarkets and to apply for their loyalty cards.

Phoenix44
Phoenix44
1 year ago

Because price fixing has never caused a black market!

His justification for doing something stupid is exactly what will be caused by his stupidity. As for his loyalty card nonsense, it simply doesn’t have sufficient information to ration properly – how many people do I have living in my house? How many are chidlren? I’m pretty sure I’ve got four adults and nine kids right now. As has every Tesco Club Card holder once they work it out.

ANNRQ
ANNRQ
1 year ago
Reply to  Phoenix44

He’d be very happy to set himself up as head of the “Ministry of Loyalty”, as Supreme Group Leader of the clipboard prodnose army coming round to inspect your cupboards for excess pasta shells and pot noddles to be liberated for the more “deserving”.

ANNRQ
ANNRQ
1 year ago

Fixing prices to stop a black market has got to be the most obvious basic example of a stupid suggestion Mr Potato Head has ever come out with.

If he can’t even appreciate that rationing and fixed prices cause black markets, he shouldn’t even open his mouth on anything economic.

Barks
Barks
1 year ago

Big problem this morning at the local little food market was parking for all the delivery trucks there to restock. A logistics problem. Rationing would exacerbate the logistics problem.

Bloke in North Dorset
Bloke in North Dorset
1 year ago

Fixing prices so that everyone gets equal access to a good is a great way to ensure that nobody gets access to that good. As soon as input costs rise suppliers will stop making them, knowing they can’t raise their prices.

Perhaps when we’ve all been put in compulsory quarantine the government could arrange for compulsory Economics 101 courses to be delivered online. You’re only allowed out of quarantine once you’ve demonstrated a sufficient knowledge.

Tim can be Testmaster General.

Stu
Stu
1 year ago

I seem to remember a very interesting article on Forbes about so called price gouging after an incident in Florida, I think.
Caused a bit of a furore as I recall.
Does anyone remember who wrote it?

Bongo
Bongo
1 year ago

Local supermarket has sold out of rapeseed and sunflower oil tonight. The shelf next door with the more expensive stuff, namely olive oil, and rice bran oil whatever that is, is close to fully stocked.
I love this.
I imagine that Marks&Spencer and Waitrose are not selling out at anything like the rate of Asda.
I love this too.
Different prices for different tastes.
No doubt Bernie would be along to say we don’t need 12 different types of cooking and salad oils and 12 different supermarket brands to try and sell them to us.

Michael van der Riet
Michael van der Riet
1 year ago
Reply to  Bongo

Good Thinking Batman. We could have a Cooking Oil Tsar, a Toilet Paper Tsar, a Broccoli Tsar ad infinitum. Somewhere there must be a job in there for Spudda.

Spike
Spike
1 year ago
Reply to  Bongo

I am a regular at the Walmart day-old bread rack because some goes to the ducks. It was bare yesterday, so I walked to their bakery and wound up paying double what I usually pay. This drastic inflation, caused by retail patterns, would not register as price-gouging.

Perhaps the answer to the Price Czar is to have a range of “different” products, including some priced so high that they (almost) never sell.

Michael van der Riet
Michael van der Riet
1 year ago

Those brilliant suggested commandments sure solved the obesity crisis in Venezuela didn’t they? It would also solve the human waste problem in SF because when there’s no food to eat, at any price fixed or not, the human body stops producing waste.

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