Economics and Chaos

It seems that no one really understands economics. Like the weather there are to many variables. Too many people making decisions that affect the global economy for it to be predicted; even by a computer. It’s out of control and only luck will bring it back under control.

In 2007, it was the collapse of Lehman brothers that was to blame for a world economic crisis and then the economists started blaming the Chinese and then the blame shifted to the Euro zone. Maybe, no one does know what’s going on despite everyone thinking they are experts.

Some individual are very rich, billionaires in fact and some companies are very rich, largely due to tax avoidance schemes. That can’t be the reason that some countries are going broke and many people are being reduced to poverty in the developed countries can it? After all, it’s the super-rich that provide investment for new jobs. Why have the Chinese stopped making and exporting so much? I suppose no one has the money to buy the stuff anymore. We are spending all their money on housing, energy and food. Why have those things gone up so much in price? I suppose it’s all down to the oil price going up. Why does the oil price go up? Is there really a shortage or is it all the wars in oil-producing countries? Are people getting super-rich and making matters even worse by speculating in oil and food?

i suppose this economics stuff is a bit chaotic, as chaotic as people’s greed. If anything is in short supply, try to make money out of it. If there is a chance of a cartel, make the most of the chance to rip people off. This happens anywhere there isn’t true competition. It happens in the energy industry. We have a virtual cartel for gas and electricity in the UK. The same applies to petrol and prices between different companies only vary by a penny or two. Bus and train fares are fixed by cartels making it difficult for many people to afford to travel to work. Even the price of housing is fixed, largely by limiting supply. To build new houses there has to be demolition orders, infrastructure and planning permission and that involves officious bureaucrats. There is always a shortage of new housing and so house prices rise, giving the builders of new houses, a cartel based on rising prices and ever higher profits.

The government is responsible for international trade agreements that help stabilise oil and gas prices. They can also regulate industry and commerce. Many international companies trade in Britain and pay little or no tax, that is a problem for the government to investigate and do something about.

The government feels qualified to cut welfare and health provision for the most vulnerable. Why aren’t they  qualified to enter into trade agreements to stabilise oil and gas prices? Why can’t they regulate industry and commerce? They put the welfare of the rich elite before the needs of the majority of the people. It’s time for more integrity in government.

There are more interesting blogs on the home page of a zillion ideas.