Mainstream Media Is Obsessed With Inflation
Commentary by Left Jabber @ “Left Jabs.” I had the fortune to run across this commentary at Mike’s Blog Roundup as presented by DriftGlass. Left Jabber is taking a different approach than I did in my earlier post. He is saying the same thing about Biden’s fiscal policy the last two years, It made for a better economy.
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Editorial Board of The Washington Post. The headline reads:
“Congress and Biden have to help the Fed fight inflation“
Note the Board — in all its august-ness — is putting this imperative out there, without a shred of irony, two weeks before a midterm election. Even as Republicans everywhere are screaming “inflation” — with multiple exclamation points — in all media, all the time. Even as they pair that word with fraught adjectives of every stripe — ‘runaway,’ ‘relentless,’ ‘record-breaking,’ ‘crippling.’ Even as they make it into a bogeyman to terrify their idiot base into voting democracy out of office.
But there’s no Republican argument so pathetic that the Post can’t give it voice. To the Board, these midterms are just one more clickbait-friendly, revenue-generating “horse race.” Nothing matters except who’s ahead, who’s behind, who’s fading, and who’s surging.
And of course it’s not just the Post. I could have zeroed in on any number of pieces in The New York Times, or in any of dozens of “mainstream” news outlets now hyperventilating about inflation.
This is just the latest variation on the “Democrats in disarray” theme. These so-called journalists simply cannot write the word ‘inflation’ without putting ‘Biden’ or ‘Democrats’ — or both — in the same sentence. Usually in the headline. Usually implying that both are somehow falling short.
In this particular article, the Board begrudgingly admits that the administration has done a reasonable job on the economy. That they’ve played a bad hand fairly well. That they can hardly be faulted for the current spasm of inflation. And that Republicans are “not offering much in the way of a concrete anti-inflation plan” — a grotesque understatement.
But despite all this faint praise, the Board nonetheless feels compelled to call on Biden — again, two weeks before the midterms — to use fiscal policy to “help the Fed.”
As if a coherent fiscal policy were possible in the next two weeks. As if responsible stewardship of the economy weren’t being sabotaged at every turn. As if the nonstop lies coming from the entire right-wing media complex would allow for any sober discussion of fiscal options. As if there were actually a functioning legislature that could weigh those options.
I won’t subject you to the whole article, which, despite the disingenuousness of the headline, makes a reasoned but pompous case for Congress engaging in fiscal legislation, aimed at sanding down the rough edges of the Fed’s monetary policy.
Let’s briefly review the difference between monetary and fiscal policy.
Monetary policy is about the Federal Reserve. It’s about the Fed tinkering with the money supply — usually by raising or lowering interest rates — so the economy can adjust to changing conditions. This is necessary, but not sufficient, since interest rates are a sort of sledge-hammer — minor adjustments can have major consequences. Raising rates too high might slow inflation, but it could also trigger a recession, a prospect now being wildly oversold by the media to stir up controversy in the final stretch of the midterm horse race.
Fiscal policy is a different animal. It’s mostly about Congress, about using legislative action to heat up or cool down the economy. When there’s a slump, Congress can approve new public projects — infrastructure, for example — to inject money into the hands of businesses and consumers. When there’s a boom, new legislation can be tailored to dampen the effects of the resulting inflation. The trouble with fiscal policy, effective as it can be, is that it presupposes a willingness of legislators to legislate. Good luck with that.
Generally speaking, monetary and fiscal policy should be working in tandem to keep the economy on an even keel — something we all want, but can’t always have.
Or, as the article acknowledges:
…[M]any factors beyond Mr. Biden’s or Congress’s control fueled inflation — especially Russia’s war on Ukraine… [W]hat we are calling for is reasonable fiscal discipline. Until inflation is defeated, fiscal policy should push in the same direction as the Fed, with no new major spending that isn’t fully or mostly paid for with higher taxes or reduced spending elsewhere in the budget.
Major spending? Higher taxes? What world do they live in?
Not that there’s anything wrong with what they’re saying, just with the context in which they’re saying it. The Post knows perfectly well that fiscal policy barely exists anymore. It’s yet one more tool of modern government that’s been effectively destroyed by Republicans. The accomplishments of the Biden administration — which are damn near miraculous — might just have been the last gasp of real fiscal policy, and it never would have happened without Democratic control of both houses of Congress. Both parties are supposed to be interested in the well-being of the nation’s economy, but only one actually is.
The Post is also fully aware that Republicans stonewall all legislation, no matter how sensible, how urgent, or how badly their own constituents need it. They assume their voters are stupid, and they’re seldom disappointed.
It’s not like inflation isn’t a real story, and a real cause for concern. It’s just that it’s the only story Republicans want to tell, they’re telling it dishonestly, and mainstream news outlets are dishonestly helping them tell it.
As national issues go, inflation is emphatically not on a par with, say, the trashing of reproductive rights, or the accelerating pace of climate catastrophes, or the deliberate demolition of democratic institutions.
And yet, “responsible” mainstream journalists are feigning an urgency that doesn’t exist, just to keep the horse race exciting. If democracy should happen to die in the resulting darkness, that’s just collateral damage.
So yes, we can expect prices to go up for a while. But inflation, like most economic issues, is famously oblivious to politics. It has a life of its own, and it answers to neither party.
Should it be part of an honest debate about real issues? Absolutely, if there were such a thing.
But in the meantime, what’s most galling about this ginned-up hysteria is the media’s complicity in turning inflation — an important but marginal issue — into The End of Life as We Know It.
Just so Democrats can be blamed for it.
(There was this, in the Boston Globe, about a week ago…)
A WIN-win tool worth trying again to curb inflation
Fred:
As corporate America sits back and watches this unfold, millions of citizens are in the path of what “will” take place in a matter of months. It is not people who willfully causing the nation to suffer from inflation or are causing the belief they are the cause. Fifty percent of the US population has 4% of the wealth of the nation. A phenomenon which has taken place since 2019.
Such power, such spendthrifts. How dare they now have access to healthcare, food, shelter, and spend for the needs of their families.
Are there no workhouses?They do not come close to the $billions gained by major corporations during the past two years and the few who should never have had PPP loans.Forgiven Loans . . .
Rep. Gregory Pence, R-Ind. (brother to former VP Mike Pence), owned two antique malls in Indiana (Pence Group LLC). received a $79,441 loan.
Marjorie Taylor Greene and her husband, Perry Greene own Taylor Commercial Inc., a construction business owned by her family in Alpharetta, Georgia. The company took out a $182,300 loan.
etc. Was their anyone one family who benefited from this amount of money thinly spread amongst the lower 50% of the population? Many of them believe they are responsible. Are they the ones ordering all of the overseas product and tying up the docks? Not likely. Staying alive is their many thrust.
Greene and Pence are amongst those opposing student loan forgiveness.
GM: Higher earnings on lower sales; General Motors easily beat Wall Street’s earnings expectations during the third quarter.
And here we are today, one day after King Powell announces the punishment is not enough. The onslaught on 50% of the population who doubles their wealth from 2% to 4% must be stopped.
If I did not work automotive and bought electronics for the product you and other drive around, I would not know this. This is a rerun of 2008 as one commenter (TBone) mentioned. How quick most of us forget.
PPP probably is not a sensible reference point in thinking of student loans. That program was designed for forgiveness and was more of an alternate unemployment funding system in response to COVID. Firms that kept their staff as per program requirements got loan forgiveness. No idea if Pence and Taylor used their loans correctly, which I think is a good question, but unrelated to views on student debt relief.
(There was this, in the Boston Globe, about a week ago…)
A WIN-win tool worth trying again to curb inflation
Boston Globe – Oct 27
I get your premise about the mainstream media doing what it can to keep the horse race going and to appear non partisan, but the fact is that inflation is very much front and center for all except the wealthiest. My concern is that with the GOP likely to take over one or both chambers of Congress and the likelihood that the Fed will overshoot and put the economy into recession, there will be no fiscal response to that recession so the economy is in the dumpster in November 2024. Alternatively, the GOP will demand outrageous quid pro quo to help the economy— nationwide abortion ban, ending Social Security, Medicare and Medicaid, unlimited oil and gas drilling, sunsetting the EPA etc. And of course more tax cuts for the rich and corporations.
Terry:
Why is inflation so bad today?
Certainly inflation is not so bad if wages—or Social Security COLA’s— keep up and you owe money. If your wages or social security COLAs do not keep up or you live off savings it is devastating. And anyone who buys groceries, drives or pays rent is well aware of it.
Yeah, but inflation is devastating to those living off their savings and a pension, as the vast majority of them are not adjusted for inflation. That describes what our retired populations are dealing with and it just happens that the last wave of the Baby Boom generation is entering into their 60s.
On top of that, wages and COL adjustments lag inflation, so the working class share of the country’s wealth falls further and further behind. Inflation benefits (1) those who own the means of production that can pass on higher costs to their customers (2) those who are in heavy debt, which includes governments at every level.
Grayson
It depends where your saving are invested (stocks, savings accounts, mutual funds, etc.) Right now, I am down a good amount I am not drawing from it and just rolling it over. We are more than Median Income and can get by on SS. Low bills and a house that has a stable payment. Federal taxes are better for SS recipients.
Killers are healthcare costs even on Medicare. Supplemental is not getting anu cheaper. LTC for us is not high monthly. Increases in SS are calculated off of CPI-W.
“the CPI-W gives food and beverages a weight of 16.4 percent, compared with 12.4 percent for the CPI-E. For housing, those weights are 39.2 percent versus 46.6 percent, and for medical care, the CPI-W weight is 5.4 percent and the CPI-E weight is 11.3 percent.”
CPI-W does not keep up with some expenses as you an see. Terry is old like I am. So, I am sure he knows . . .
Thanks Grayson for your comments.
run75441,
Again, COL adjustments lag inflation. A social security recipient has faced an 8+% increase in living expenses since last January and the 8.7% increase in SS payments will not occur until the beginning of 2023. That’s 12 months that a retired person will deal with inflation, thus a lag. If inflation were 0.5%, that bite into their SS payment for a year is far less significant.
And it’s even worse for a retired person’s pension and savings, even if they did the responsible thing and put it in T-notes or T-bills. Take a hypothetical person who retired in 2017: the purchasing power of their pension and savings (assuming they aren’t in treasuries) has diminished by more than 20% through NO fault of their own. They did the responsible thing and worked and saved for decades only to have at least a fifth of that work savings disappear in only FIVE years. And imagine being a working person in their 20s right now: what is the incentive to work hard if by waiting a year, you can start at a higher wage and inflation won’t eat at whatever you’re able to save? This is a large part of why the labor participation rate is so low right now (now at only 62.2%), despite the huge number of job openings.
High levels of inflation wreak havoc on economies, full stop.
été indien
when the FED Governor’s chairman indicated that thinking about thinking about talking about pivot it’s not in the cards, the M2 money supply contraction was at 4.5%. as all of the players digested his message the M2 Supply contracted even faster which means that vendors will quickly mark down their inventory, dump inventory in order to prevent losing even more profit margin later. stockholders dumped their Equity Holdings at the rapidly deflating price reset.
And the US Dollar Strengthened!
M2V bottomed on March 020 and is accelerating as concomitant inventory velocity revs up. This means that workers will be called back to the workplace to replace the falling inventory and GDP will rise as per capita GDP will provide greater aggregate prosperity as we go into election season.
bless the US$
Bless America
!
That was an excellent rant and accurate too. He left out the fact that much of the “inflation” is simple price gouging. That is the last thing Republicans would try to restrain.
It takes a well-to-the-left-of-center federal guv’mint to effectively tackle the serious income inequality issues in the good old USA, and that is not going to happen soon. IMO, Joe Biden is making an effort, but much of his party faithful are not behind him. Efforts to deal with such inequality is always regarded as ‘socialistical’. And the result, truly, is that the rich get richer.
In MA, there’s a so-called ‘millionaire’s tax’ referendum on our election ballot for this Tuesday. A very effective campaign has been mounted against it (IMO). Why? Housing prices, for example, are through-the-roof in our state. Homes that sold for $100k when we bought ours 40 years ago are going for well over $1M now. If you sell such, you could end up paying the millionaire’s tax.
We can’t even pass a graduated state income tax here. (Our constitution requires changes to permit either the graduated tax, OR the millionaire’s tax. Hence the referendum.)
Everyone knows the Democrats caused inflation by being too generous to brown people. All you have to do to heal broken supply chains is cut wasteful government spending. I saw all of this on TV so I’m sure it is true.
High inflation is just a mystery that cannot be explained.
https://jabberwocking.com/wp-content/uploads/2022/11/blog_markup-1.jpg
Today’s inflation is pretty extraordinary it seems. In New England, we’ve come to accept obscenely high home prices, but I’ll put it down to ‘boiling frog’ acceptance of the inevitable.
Don’t tell me that isn’t really a thing.
Sorry, but if voters don’t think inflation is a “marginal issue”, then it isn’t. Democrats don’t need to be blamed for it, but it is their job to make that case. Complaining about coverage of the issue is pretty silly.