Wednesday, May 6, 2020

Skidelsky: Inflationary Depression Possible

Robert Skidelsky
The Keynesian scholar Robert Skidelsky seems to be better on the price inflation question than some Austrian school economists who seem to be denying the possibility of stagflation and argue there can't be accelerating prices because of "weak demand."

They in fact are doing a greater aggregate dance than Skidelsky,

Skidelsky, on the other hand, recognizes that the world economy could face an “inflationary depression” as it emerges from lockdowns, with government spending propping up demand even as unemployment soars, reports Bloomberg.

What makes the economic shock from the coronavirus different to the Great Depression, he said, is that shuttering industries to control the disease has yet to cause a plunge in purchasing power -- largely because governments have stepped in to subsidize wages.

“As we come out of the lockdown, there is going to be a depression and inflation at the same time,” he told Bloomberg TV’s Tom Keene and Francine Lacqua in an interview.

It is not only propping up wages but Fed pumping money into the system everywhere but Skidelsky has the big picture right.



  1. It really makes me feel my age when almost no one else remembers the "stagflation" of the 70's.

    1. I was just a young, dumb teenager, with the ever-present attitude "what, me worry?" and "Everything works out in the end."---not much different than today's Progressives.

    2. we waited in long lines to fill up with price controlled gas and were lucky to get to the pump before it ran out of gas. Was it worth the lower than market price? Hell no.

    3. Y'know what really ticked me off? It was the stupid odd/even licence plate nonsense. For those kids out there, during the 70's "gas crisis", states (like NY) enforced this deal where you could only gas up on odd days if your plate ended in an odd number and vice versa for evens.
      What of course happened, was that people who had plenty of gas, would feel it necessary to fill up on "their" day, just to be sure, which pretty much DOUBLED the jam up at the pumps. Brilliant. Only a government could come up with something so stupid.

    4. Capn, what's an "odd day"---? Sunday, Tuesday, Thurs., Saturday--?
      Doesn't seem fair or logical, that those with the odd numbered plate get 4 out of 7 days to gas up, and the unlucky even-numbered folks got 3 out of 7. But when was government ever fair or logical?

    5. Date, Dude. You know, like the 4th, the 5th, etc.
      And yes it IS nuts. Er...was.

    6. Oh, and yes, there was the unfairness of the 31st / 1st month end. For once it paid to be ODD, harhar.