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Rising prices, rather than nukes threatens the regime
Every time a Central Bank announces a new monetary policy, analysts launch a furious debate about how anti-inflationary the latest moves are. If interest rates go up, almost everybody seems convinced that the government is deeply worried about rising inflation and “wants to squeeze liquidity away from the financial system”. There is a reason why governments, central banks, economists and analysts appear obsessed with inflation. In the bad old days of monarchy and feudalism, persistent inflation led to insurrections and civil wars. In the first few decades of the 20th century, rampant hyper inflation played a significant role in the emergence of Hitler and fascism as a force to reckon with in Germany. Intolerable levels of inflation that plagued Russia in the 1990s forced local citizens to fondly look back upon the dictatorial days of the Soviet Union with nostalgia; and encouraged Vladimir Putin to consolidate power in his hands as a de facto dictator with tacit approval from fellow citizens.
The simple fact of life is: inflation for the average citizen means a time when prices are rising faster than disposable incomes. People hate it when they have to scrimp and scrounge and pinch pennies to stretch the household budget. In ancient times, people often ended up literally killing and butchering when hate took over. They still do it. But in modern democracies, dislike and hatred usually results in votes and mandates that throw out incumbent governments during elections. Many a President and Prime Minister has seen power slipping away like spring clouds on a balmy afternoon because his/her administration was unable to check and control prices.
That is a fundamental lesson that the likes of Sonia Gandhi, Manmohan Singh and P. Chidambaram can ignore at their own peril. The average Indian citizen may not understand the intricacies and contempt of the nuclear deal. But they get the message when the prices of onion, wheat, cooking oil, milk, vegetables, fruits and transportation start going up and hurt their family budgets.
It really doesn’t matter when the Finance Minister and the Governor of the Reserve Bank of India keep claiming success in the battle against inflation by saying that the rate of inflation is below 4%। The citizen and the voter have no patience for jargon and sophistry; nor do they like euphemisms. The best thing that the powers-that-be in the Congress can do at the moment is order statisticians and economists to devise a new index of inflation that reflects the reality of relentlessly rising prices of ‘essential items’. It is only then that they can begin to understand the plight of consumers who will soon become angry voters.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
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Rising prices, rather than nukes threatens the regime
Every time a Central Bank announces a new monetary policy, analysts launch a furious debate about how anti-inflationary the latest moves are. If interest rates go up, almost everybody seems convinced that the government is deeply worried about rising inflation and “wants to squeeze liquidity away from the financial system”. There is a reason why governments, central banks, economists and analysts appear obsessed with inflation. In the bad old days of monarchy and feudalism, persistent inflation led to insurrections and civil wars. In the first few decades of the 20th century, rampant hyper inflation played a significant role in the emergence of Hitler and fascism as a force to reckon with in Germany. Intolerable levels of inflation that plagued Russia in the 1990s forced local citizens to fondly look back upon the dictatorial days of the Soviet Union with nostalgia; and encouraged Vladimir Putin to consolidate power in his hands as a de facto dictator with tacit approval from fellow citizens.The simple fact of life is: inflation for the average citizen means a time when prices are rising faster than disposable incomes. People hate it when they have to scrimp and scrounge and pinch pennies to stretch the household budget. In ancient times, people often ended up literally killing and butchering when hate took over. They still do it. But in modern democracies, dislike and hatred usually results in votes and mandates that throw out incumbent governments during elections. Many a President and Prime Minister has seen power slipping away like spring clouds on a balmy afternoon because his/her administration was unable to check and control prices.
That is a fundamental lesson that the likes of Sonia Gandhi, Manmohan Singh and P. Chidambaram can ignore at their own peril. The average Indian citizen may not understand the intricacies and contempt of the nuclear deal. But they get the message when the prices of onion, wheat, cooking oil, milk, vegetables, fruits and transportation start going up and hurt their family budgets.
It really doesn’t matter when the Finance Minister and the Governor of the Reserve Bank of India keep claiming success in the battle against inflation by saying that the rate of inflation is below 4%। The citizen and the voter have no patience for jargon and sophistry; nor do they like euphemisms. The best thing that the powers-that-be in the Congress can do at the moment is order statisticians and economists to devise a new index of inflation that reflects the reality of relentlessly rising prices of ‘essential items’. It is only then that they can begin to understand the plight of consumers who will soon become angry voters.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
