Wednesday, November 10, 2021

What the Media Isn't Telling Us About the Economy

With a better-than-expected jobs report and passage of the infrastructure bill, Friday was a banner day for the Biden administration. That caps an impressive list of accomplishments for the 46th POTUS in less than a year.

Given that the economy is a top concern for most voters, all of that should be good news, right? But according to Neil Irwin at the New York Times, that is not the case.

Americans are, by many measures, in a better financial position than they have been in many years. They also believe the economy is in terrible shape...

Workers have seized the upper hand in the labor market, attaining the largest raises in decades and quitting their jobs at record rates. The unemployment rate is 4.6 percent and has been falling rapidly. Cumulatively, Americans are sitting on piles of cash; they have accumulated $2.3 trillion more in savings in the last 19 months than would have been expected in the prepandemic path. The median household’s checking account balance was 50 percent higher in July of this year than in 2019, according to the JPMorgan Chase Institute.

Yet workers’ assessment of the economy is scathing...The reasons seem to be tied to the psychology of inflation and the ways people assess their economic well-being.

It would be interesting to know what Irwin meant by the "psychology of inflation." We know that right wing media has pretty much ceased reporting on anything else related to the economy - doing its job of riling up their MAGA base. But the truth is that mainstream media is part of the problem too. A couple of recent examples from CNN illustrate the problem.

Here's a story that garnered a lot of attention last week:   

Evan McMorris-Santoro went grocery shopping with a family of 11 (2 parents and 9 kids) and billed it as a story about "what it actually means to live in America right now." Much of the reaction was about buying 12 gallons of milk a week. But that misses the point. The real problem was the suggestion that the price of milk had gone from $1.99 to $2.79. As Kevin Kruse asked, "when was the price of milk $1.99?" Here's what the U.S. Inflation Calculator reports:

But as Aaron Gordon reports, by focusing on groceries, the entire segment was off base.
Ironically, dairy is actually benefiting from among the lowest rates of inflation at the moment, with the BLS reporting dairy prices have risen just .6 percent over the last 12 months...

But it’s not just about milk. While food prices are increasing, they’re not doing so at an especially alarming rate. According to the most recent Consumer Price Index released by the Bureau of Labor Statistics, food prices have indeed gone up a bit, with grocery store prices up 4.5 percent year over year. A healthy rate of inflation is typically regarded as around one to two percent. But it’s also far from crisis levels.

What CNN omitted from the story is that, as a typical middle class family with 7 kids, the Stotlers would be getting $1,400 to $2,100 per month as part of Biden's child tax credit. That would go a long way towards addressing the issue of inflation.

Even more egregious was this tweet from CNN's Wolf Blitzer on Tuesday. 

Apparently that particular gas station is near CNN's Washington, DC office. But local residents were quick to point out its reputation. 

Charlotte Clymer broke the whole thing down here, pointing out that the national average for a gallon of regular is now $3.41, almost 90 cents per gallon cheaper than Blitzer's example. 

None of this is to suggest that inflation isn't a problem. President Biden acknowledged that in a statement about the economy: "Inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me." But as Transportation Secretary Pete Buttigieg explained, when it comes to the economy, good news often comes with bad.

One of the drivers of inflation is that, as we begin to recover from both the pandemic and the recession it caused, people are back to work and wages are rising. As a result, demand is surging. When demand exceeds supply, prices go up. That's economics 101. Inflation will likely persist until the supply side catches up.

That is the story the media should be telling. Instead, we're getting outright lies from right wing sources and contextless exaggerations from mainstream media. Do you suppose that helps explain the anxiety voters are feeling?

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1 comment:

  1. JohnHNovember 11, 2021 at 9:40 AM

    Again, terrific post and welcome back. I'll just say that this, too, along with the subject of the previous post, a false view of Biden and his party when it comes to race and education, wouldn't have had anywhere near the influence it has or its impact on the recent election without the Times and other mainstream media Irwin himself shares the blame for catering to conventional wisdom in a way that feeds the image of Biden as a failure, because (depending on the article) he promised to deliver another New Deal and failed or else he asked to deliver one that no normal person, especially that mythic center to which just two Democratic senators belong, because of intolerant Democrats like Pelosi, AOC, or whatever other villain is needed.

    To those two issues, it's only right to throw in Afghanistan as one in which Biden acted well only to be characterized day after day as an incompetent loser. That image goes into another article in the Times yesterday as well. It asked how a Democratic-leaning district on Long Island (of, of course, wealthy whites) has turned on Biden. And again and again no one cited ideology (too wedded to compromise or too lefty). It was all his failure to lead. Never mind that the military and intelligence never foresaw that our guys would turn tail instantly and run, even months after Trump's promise to leave, nor that Biden had the courage not just finally to extricate the U.S., but also the skill to respond to that failed intelligent, turning on a dime so as to evacuate record numbers with minimal to no U.S. casualties. But then how COULD the military have predicted that? It would hardly have been consistent with the faith in our guys that allows the military and the media to keep saying that if only we'd stayed another month, we would have won.

    OK, throw in too how the GOP gets to block vaccination efforts so that the resulting spread of Covid-19 can then be another broken promise. But then hasn't that always been the GOP strategy? Make government fail, so that they can then campaign against government. And can watch the public, fed the story day after day by the press, eat it up.

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