What about the locally induced part of prices?

The leader of the Times of Malta (August 9) was about ‘Getting a grip on inflation’. It made reference to many of the factors that have to do with inflation in the Maltese islands… except a very important one: endogenously created or stimulated inflation.

Every basic economics student is taught about exogenously and endogenously creat­ed inflation. But the Times of Malta failed to even say a word about the latter, what it is and what can be done about it.

As things would follow, on the morrow of that leader the letters to the editor columns included a perfect example of how things are allowed to be done in Malta. The major political parties have found it comfortable to endlessly utter the mantra that “one cannot do much about inflation because prices increase from abroad”.

Photo: Chris Sant Fournier

That, however, is only a part of the truth about Malta’s inflation and the reality is that our National Statistics Office or Central Bank of Malta or most economic pundits never come out with any form of statistics which give us exact details of which part of our inflation is exogenously sourced and which is the result of the current fallacious economic policies of the government never daring to confront that thing called “the market”.

“Prices will have to rise because most of what we sell comes from abroad” goes the mantra. But what about the way, including percentages, of mark-ups and other add-ons uncontrollably indulged in arriving at final selling prices to the local consumers?

Why? For one thing, the lobbyist bodies have become so powerful that all parties want to have them on their side. For another, both the political class and the civil service are simply terrified stiff of having to engage with serious investigating of why – and how – the prices of products are being continuously raised in Malta.

Costings and arbitrarily decided mark-ups would be a nightmare for our civil servants to have to go into and, so, staying away from any such market intervention is very comfortable… just let the citizen simply accept it and pay more.

Locally sourced inflation is rampantly happening everywhere: grocers, restaurants, bars, takeaways, even professional service providers: everyone pressing down on the one below him or in contact with him. The multiplier effect, of course, helps the exponential, cumulative effect all round.

The stratagems and ruses resorted to for such uncontrolled price rises, and, of course, fast profit increases, are often many. During the current season we have seen, for example, a lot of unbridled resorting to reduction of container sizes, of sold portions and quantities, concurrent with price rises.

The “wisdom” of the local businessman is indeed endless and will continue to run rampant for as long as the current policies being followed by the political class are allowed to persist.

John Consiglio – Birkirkara

Dreaming together, working together

One of the greatest English singers, songwriters, musicians and peace activists, John Lennon, said: “A dream you dream alone is only a dream. A dream you dream together is reality.”

Can we join hands and together materialise a better world, both for the born and the unborn? Can we work on this dream together?

Fr Mario Attard, OFM Cap – Marsa

Letters to the editor should be sent to editor@timesofmalta.com. Please include your full name, address and ID card number. The editor may disclose personal information to any person or entity seeking legal action on the basis of a published letter.