Who is to blame for inflation?

THE EDITOR: The governor of the Central Bank says that what is worrisome is not the rate of inflation but the inflationary (sic) psychology that seems to be pervasive. Tell that to the people purchasing food in the supermarkets everyday! They are not impressed by high-flown language: they are concerned with the high prices they have to pay. He explains that in anticipation of price increases on their incoming shipments, distributors (because that is all they are), would attempt to seek their economic interests by increasing prices on current stocks. Really? “Attempt to seek their economic interests...?” Boy, talk about dressing up things in fancy language!

My dear Governor, that is profiteering — nothing more, nothing less. How does the Governor justify increasing prices on goods for which they have already paid a lower cost? In anticipation of price increases on incoming shipments. Not even on the basis of established increases — In anticipation. Wow! And that apparently makes good economic sense to him. When trade unions seek to negotiate salary increases for their members to help them pay these higher prices, apparently that is when the inflation spiral starts. Not by merchants increasing their prices — no, no! Only when the unions get salary increases for their members.

I stand in awe at the perspicacity of the Governor. Help me, Sir by telling me how many unions have succeeded in negotiating high wage increases for their members, in what areas of the economy they operate and in what ways these increases have contributed to inflation. Perhaps he could also examine the theory that inflation is imported and a tiny market like Trinidad and Tobago (smaller than any major city in the United States) cannot hope to affect these trends. Reduce the country’s dependence on imported items, especially food and more will be done to reduce inflation than any other single action.

KARAN MAHABIRSINGH
Carapichaima