I think the inflation preoccupation is a bit of a shibboleth. Inflation in the seventies shaped a political generation. Right wing parties were elected to stop it. Left wing parties could not be elected unless they committed to tight spending. It's a formative experience for everyone.
As it happens, these days, its all bullshit. There are no inflationary pressures (except maybe London house prices). These politicians congratulate themselves for reaching a target that they were heading to anyway. It just means that their economies are not very vibrant.
In message <p05100300b85a421e25f9@[216.254.77.128]>, Doug Henwood
<dhenwood at panix.com> writes
>pms wrote:
>
>>But anyway, my question, if someone would be so kind: With soft pricing in
>>manufactured goods and all, why is EU worried about inflation? Is it
>>because they provide services like healthcare which are heading into
>>hyper-inflation? And because their people have unions? Or is it some other
>>kinda thing?
>
>Euroland is closer to deflation than inflation, so I can only guess
>that the ECB wants to keep unemployment high to keep political pressure
>on for "reforms" - i.e., a more U.S.-style labor market, i.e., working
>harder for less.
>
>Doug
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