Inflation is high, and unemployment is low. What does that mean for Americans? If you listen to the talking heads, you’d think it’s all about inflation. But that's wrong.
Another really first Rate analysis. But don’t be too hard on Ben.
Although the economics clearly show that recession is worse than moderate inflation, Iinflation is a much better story. The media carries it daily, with reporters standing at gas pumps. Everyone who drives or shops at supermarkets has stories to tell about how much it cost them to fill up their tank or to Buy a flower pot or a steak. Few if any of them realize how much they gain from a buoyant economy. All of them know how much they’re losing from inflation. Politicians of course follow the media As well as guide it and are led by Voters fears as well as create them.
Great post. Thank you. I finished grad school, stared my career, and bought a house in the early 80s, when no one would sell to me on the GI Bill & mortgage rates were some 17%. Never missed a meal. If you have a job, you can cope with inflation. Not easily, maybe, but you can do it. Got no job? That's really really tough.
I don't doubt for a moment that you are correct in economic terms, but politically representatives are FAR more responsive to inflation than unemployment (except in true crises where the latter is concerned) for precisely the reason Bernanke revealed -- most of the voters still have their jobs.
Where the public discourse is concerned the narrative is even more skewed in favour of the inflation bogey -- virtually all of the chattering classes (the venn diagram overlap of which with bondholders approaches a unity; that goes triple for the owners of all media outlets) is either always employed or has nothing to fear from unemployment, and has everything to fear about inflation as bondholders.
Another really first Rate analysis. But don’t be too hard on Ben.
Although the economics clearly show that recession is worse than moderate inflation, Iinflation is a much better story. The media carries it daily, with reporters standing at gas pumps. Everyone who drives or shops at supermarkets has stories to tell about how much it cost them to fill up their tank or to Buy a flower pot or a steak. Few if any of them realize how much they gain from a buoyant economy. All of them know how much they’re losing from inflation. Politicians of course follow the media As well as guide it and are led by Voters fears as well as create them.
Great post. Thank you. I finished grad school, stared my career, and bought a house in the early 80s, when no one would sell to me on the GI Bill & mortgage rates were some 17%. Never missed a meal. If you have a job, you can cope with inflation. Not easily, maybe, but you can do it. Got no job? That's really really tough.
I don't doubt for a moment that you are correct in economic terms, but politically representatives are FAR more responsive to inflation than unemployment (except in true crises where the latter is concerned) for precisely the reason Bernanke revealed -- most of the voters still have their jobs.
Where the public discourse is concerned the narrative is even more skewed in favour of the inflation bogey -- virtually all of the chattering classes (the venn diagram overlap of which with bondholders approaches a unity; that goes triple for the owners of all media outlets) is either always employed or has nothing to fear from unemployment, and has everything to fear about inflation as bondholders.
Media outlets push gloom and doom. Sentiment surveys over decades show unemployment is as unpopular as inflation.