FAIR: Media Obsession With Inflation Has Manufactured Discontent

2023 is over, and with it, the great inflation surge of the last few years has essentially come to an end. As the progressive economist Dean Baker trumpeted shortly before Christmas, “This Economy Has Landed, We Are at the Fed’s Target” (Beat the Press, 12/22/23). Inflation is now at 2.6%, according to the Federal Reserve’s preferred measure, and is trending further downward. Remarkably, since the Fed began raising interest rates in the spring of 2022, unemployment has maintained a historically low level of below 4%.

Contrast that with the US’s last experience with an extended period of elevated inflation. That was the double-digit inflation of the late 1970s/early 1980s, which the Fed fought by sending unemployment skyrocketing—from 6% in 1979 to a peak of nearly 11% in 1982. With inflation tamed in the fall of 1984—down to 4.3%—President Ronald Reagan declared “Morning in America.” At the time, the misery index, a rough gauge of societal suffering that sums inflation and unemployment, clocked in at nearly 12%. Today, the same index sits around 7%. If the fall of 1984 was morning, we’re well into the day. The dark, turbulent night is not only behind us; it’s been over for a while.

That’s not how most of the American public seems to feel, though. People continue to rate the economy stunningly poorly, given its performance of late. The University of Michigan’s Index of Consumer Sentiment, for instance, most recently registered 61.3, versus 100.9 during “Morning in America.” In other words, consumer sentiment is currently 39% lower than it was at a time when the misery index was 41% higher. Meanwhile, Joe Biden has a lower approval rating than any president going back to Jimmy Carter at the equivalent stage of their presidencies (New York Times, 12/28/23). Biden is, in fact, 15 percentage points lower than Reagan, whose economy at the same period of his presidency was, in key respects, significantly worse—unemployment, for instance, was 8.3%.

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... there’s another fundamental cause of economic discontent that should be getting more attention: corporate media’s single-minded obsession with inflation, which has left the public with an objectively inaccurate view of the economy.

FAIR has stepped up to the batting plate with their own possible explanation for why everybody hates the economy despite macroeconomic indicators being so positive - that the media has been too negative about the economy and so everybody is just seeing that analysis and going "Huh, the economy must suck even if my life personally is fine." A swing and a very large miss for FAIR.

But how could this discontent possibly be?! We have done the soft landing! Inflation is way down! Look at our GDP! Idiotic. Inventing macroeconomic figures to quell the misery index will not actually make the underlying problems go away. So now we're in a situation where the actual state of the economy isn't being measured, causing immense confusion for navel-gazing dipshit economists.

The US economy does, in fact, very much fucking suck if you aren't in the top 1-10%. Student loan repayments restarted in October. Fake job listings are inflating the figures. Delinquency rates are at their highest level in almost 30 years. 12.8% of American households were food insecure in 2022, up from 10.2% in 2021. In early 2023, there were record levels of food bank usage despite record low unemployment. US life expectancy is declining. The impact of letting coronavirus rip through the population continues to work in the background. Despite all the hopes, AI almost certainly will not deliver the bourgeoisie to the new promised land of high productivity, as the crisis there continues. Some states are trying to reintroduce child labor.

US Gross Domestic Income has been stagnant since October 2022. US manufacturing PMIs also haven't been positive since October 2022. It's been over a year straight of decline. The post-pandemic boost is well behind us. The US economy is being supported by marginal expansions in services PMI, with the composite coming at 50.9 for December 2023, or 0.9 above stagnation. The services PMI is being supported by healthcare, education, and technology - the last of which received major subsidies due to the Inflation Reduction Act and the Chips and Science Act. The most high-tech sectors are growing, but everything more fundamental is mired in the longest continuous slump in two decades. Non-financial sector corporate profits are falling.

All of this, while the US has been manipulating its vassals to try and get them the best possible economy. They started a war with Russia and then blew up Nord Stream to weaken Europe and force them to buy more energy and goods from the US. They are trying to isolate China via protectionist sanctions designed to boost the US economy instead. All of this warmongering and blood, and it gets the US an economy that is, if you're being very optimistic, merely stagnating (and in actuality is declining).

You know what hasn't declined? The stock market, which is at all-time record levels.