Yes, the consumer-price index on Thursday came in high. On the other hand, economists have been warning for some time that we should expect some real but transitory inflation this summer — and also that year-over-year numbers would be skewed by prices plunging last spring due to the pandemic. Yet concerns about inflation appear to be getting a lot more attention right now than worries about jobs, even though millions of people are still out of work.
Why the hype? I can think of several reasons.
As Gregg Easterbrook pointed out long ago, there’s a general media bias toward focusing on the potential downside of any economic news. Two partial exceptions over the past 50 years have been in the late 1990s and the late 2010s. But otherwise, there’s a tendency to emphasize the perils of slow growth during downturns … and then to focus on the risks of overly fast growth in good times. A year ago, we were being warned of a new Depression; now it’s inflation. It’s always something.
I suspect that those of us who remember the real inflation years of the 1970s are particularly susceptible to this tendency. It really was scary! Economists, at least for a while, seemed mystified about how to address the problem, and certainly had no suggestions that politicians would get behind. Eventually it turned out that conquering inflation was possible, but the cost was high, and those who lived through it are understandably reluctant to return to such a scenario — and perhaps overly eager to sound warning bells.
Another factor? Questions about inflation right now are a genuinely interesting puzzle. While there certainly are a number of questions about unemployment now, for the most part I think there’s less confusion. And after all, those who don’t remember the 1970s have seen jobs slump and bounce back several times. For them, US inflation is new and different, and therefore interesting.
And one more, which is partly speculative. Republicans are certainly hyping inflation. It’s normal for the media to pay attention to the complaints of the out-party and to use them as a guide to what’s going wrong. The speculative part? The “neutral” media have a strong bias toward “both sides” coverage, in which the press presents the viewpoints of Democrats and Republicans and leaves it to readers to decide the merits of each. There’s some virtue to that kind of coverage, but it runs into big problems (including the plain fact that there are more than two sides to most questions). Former President Donald Trump presented a big challenge to that kind of coverage because he kept saying things that weren’t true. I suspect that the conflict between the norm of reporting “both” sides neutrally and the norm of truth-telling probably made a lot of journalists uncomfortable for the past four years.
What does that have to do with the price of used cars? Republican complaints about inflation may be overhyped, or even wrong, but they’re generally not fictional. Focusing on them allows the neutral media to return to familiar, and safer, territory. I see a fair amount of this going on in other reporting, whether on the origins of the pandemic or the provisions of Georgia’s election law. But inflation fears are better. They are, more than anything, normal. And I definitely understand the preference to get back to a world where the in-party claims (based on real evidence!) that everything is getting better and takes credit, while the out-party finds (real, non-fictional) things that aren’t going well and casts blame. Sorting out those claims is part of democracy.
Unfortunately, that’s not really the world we find ourselves in. But I understand the impulse to wish we were there.
Bloomberg
