Inflation

Well, I'm back in dublin now after my weekend home, paid €24 for the train ticket and €1.10 for the 90 bus into town from Heuston. "Big deal, so what?" you say, but the last time I went home before xmas those prices were €23 and €1 respectively. Add that to the return dart ticket to work going up by 10¢ and it seems everyone in the transport sector has clubbed together to make sure that my monthly pittance (know in some circles as "wages") lasts that fraction less time each month than before. OK, maybe I can't really complain about the train cost since I'm still getting cheap fares due to getting my under-26 farecard 5 days before my 27th birthday, but it still made me start thinking about inflation. Just like paying €4.60 for what used to be a £3 pint, or €8.70 for a cinema ticket that cost €7.50 about this time last year. The films ain't gotten 16% better (King Kong was good but not that good), or the pint 18% more alcoholic, so where'd the extra dough come from? Oh yeah, inflation.

I'm no economist so I may be missing something here, but the best way I can come up with for describing inflation is "stuff costs more because the stuff you need to produce the stuff costs more" or even simpler, "everything is more expensive because everything else is more expensive". But why? Where did it start? Some reasons for prices going up I can get, like oil prices going up 'cos Katrina and the Waves flatten the Gulf Coast oil rigs, some raghead militants blow up some pipelines in Basra, or the iranians get stroppy with the UN over whether they can have nukes or not, and I can see how oil going up has a knock-on effect on the cost of transport, and everything else goes up a bit 'cos it costs more to get it from where it was made to where it was sold, but other causes of inflation leave me shaking my head. Take insurance, say. The insurance companies bump up their premiums, so it suddenly becomes more expensive for everyone to do business, so prices creep up a bit more. But why did they put it up in the first place? "Well, it costs us more to do business as well". Um, yeah, but that's 'cos of the knock-on effects of you putting up your prices last time. Nice profits this year by the way, up on last year are they? Strange that. It's like a dog chasing its tail, around and around.

Here's an idea, the insurance companies keep saying they have a responsibility to their shareholders to make profits for them each year, hence the price rises to keep earnings above the inflation they've had a big part in already causing. So how about this: anyone who buys shares in insurance company X also has to take out an insurance policy with X, and then let X up the premiums on them and leave the rest of us alone. Let's see then if the extra share money going into their pockets balances out the extra they're paying for cover.

Here's another thought. Every time something gets more expensive it's because something else has gotten more expensive first, so logically it stands to reason that somewhere back in the dim and distant past someone upped the price of something and started the whole ball rolling. Well, the second time travel is invented, someone should go back in time and kill that guy, stop the problem at its source. Then they should go and kill Adam Smith or whichever economist came up with the idea in the first place, just so no-one can go getting any bright ideas from him. There we go, sorted! Next problem please?