Stagflation

Well, whoop-de-do. What a forehead-smacking surprise. ASI reports that the Governor of the Bank of England is sanguine that the present surge in inflation is due to temporary factors such as the rise in VAT, rising energy costs and the increased cost of imports following the devaluation of sterling. It will all settle down as the economy recovers, while spare capacity in the labour market will bring down inflation.

Couldn't be anything to do with having printed an extra £200 billion, could it? No, says Mervyn King, because the British economy will bounce back and give post hoc justification for having printed an ocean of money. Hmm, let's see: the sole area of increased employment over the last ten years has been the state sector, whose inflationary pay settlements were paid for by borrowing against the projected future revenues from a financial sector that was permitted to overheat to self-destruction under the supervision of - Mervyn King.

Neither of those growth hormones are still flowing through the British economy, but there's nothing to worry about. Why, just look at the great results Keynesian spending produced in the British economy back in the 60s and 70s! The wonder of the world, we were; and will be again - by doing exactly the same things that produced such excellent results the last time. Can't fail.

A society that chronically imports more than it exports, and a government that chronically spends more than it collects in revenues, has once again produced stagnation combined with inflation. Over a century ago, George Santayana said something that, in stark contrast to the tenets of "progressivism", has proved true ever since:

Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.