The inflation monster is baaaaaaack

A sober look at the menace of inflaation.

Matthew Wright

This week New Zealand’s inflation hit a 31-year high after decades when the spectre of relentlessly rising consumer prices seemed to have been conquered forever. What happened can only partly be blamed on domestic issues – a 32 percent rise in the price of fuel, for instance, simply had to be accepted. Although that last issue is, at least in part, an ‘own goal’ given that the neo-liberal ‘reformers’ of the late 1980s abandoned plans to make the country 50-percent self sufficient in petrol, handed much of the infrastructure over to private enterprise at bargain basement prices, and – just this year – that same private enterprise has closed the only refinery in the country. But I digress.

Why has the old twentieth century monster, inflation, suddenly exploded into life? Surely it had been beaten, thrashed to within an inch of its life a generation ago by draconian economic policies…

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