A ‘Biden Boom’ And The Corporate Media Is Parroting GQP Gloom And Doom Propaganda

The corporate media is once again recklessly feeding self-fulfilling inflation psychology with hysterical headlines, to wit, the New York Times today. Inflation Rising at Fastest Pace in Nearly 40 Years, New Data Shows – 6.8 percent over the past year.

Historical context is required. As I have explained previously, the world economy is coming out of a once in a lifetime event with the Coronavirus Pandemic, which literally shut down the world’s economy for a period of time. It is to be expected that there will be supply-chain disruptions and shortages of consumer goods resulting in inflation temporarily, as consumer demand currently exceeds supply capacity.

I would add that what gets left out of all this hysterical inflation reporting is price fixing, price gouging and profiteering by businesses taking advantage of the situation (a crime in many states). Where is the media coverage about state attorneys general prosecuting companies for price fixing, price gouging, and profiteering? Are these AGs not doing their jobs? This is a story for the media to report.

As I have explained previously, the closest historical parallel to our current situation is the post-World War II economy as the world shifted from a war economy back to a consumer economy, with the resulting supply-chain issues and shortages of consumer goods and resulting in inflation.

Republicans and their propaganda media are making ludicrous claims that inflation is now higher than it has ever been. They are ignorant, or liars, or both. They are recklessly feeding self-fulfilling inflation psychology with this hysterical nonsense.

The U.S. Inflation Calculator provides Historical Inflation Rates: 1914-2021. Here is the data broken down by historical events:

World War I (U.S. Entry and Post War)

World War II

Post World War II Conversion Period (a comparison to today)

Korean War*

• The OFFICE OF PRICE STABILIZATION also known as the Price Stabilization Board, was the federal agency whose task was to control prices during the Korean War. The onset of hostilities on 25 June 1950 came as a complete surprise to Americans. Fear of a major conflict with the Soviet Union and China and still-fresh memories of rationing programs during World War II lead to massive hoarding and panic buying by both consumers and manufacturers [see 1951]. This led to the Defense Production Act of 1950, which gave the president the option of imposing rationing and wage and price controls. Price stablization was imposed from January 1951 to February 1953.

The next big inflationary period followed the OPEC oil embargo during the 1973 Arab-Israeli War, the Oil Shock of 1973-74, and the Oil Shock of 1978-79, or Second Oil Crisis. This was a period of economic “stagflation,” which is not what the economy is experience today, despite the ignorant lies being told by Republicans and their propaganda media.

The first thing you should notice is that in each of these historical periods, inflation far exceeded what it is today. And America survived and prospered, becoming the wealthiest nation in the world.

This too shall pass, if everyone gets their Covid vaccine shots and boosters, masks up, and social distances. Do your part for the war effort. Those who are sabotaging this war effort – Republicans – have no right to complain about the damage they are causing to the economy, and to the lives of their fellow citizens out of their nihilism.

Economist Paul Krugman explains today, How Is the U.S. Economy Doing?

Last week’s employment report was puzzling. The Bureau of Labor Statistics carries out two separate surveys, one of employers and another of households; we normally expect the two to paint a similar picture. This time, not so much.

The employer survey was, to use the technical term, meh — 210,000 jobs added, a respectable number but not what many had hoped for. [C’mon Paul. Those expectations were unrealistic. The number will also be adjusted upwards in coming months. Remember when the media would piss their pants with excitement any time Trump surpassed 200,000 jobs in a month, by way of comparison?]

Yeah, about that.

The household survey, however, was terrific; in particular, the employment rate among prime-age adults, a key measure of labor market health, is beginning to approach prepandemic levels.

Well, we shouldn’t make too much of the apparent inconsistencies in the report. Noisy data happens, and overall the economic picture looks pretty good — indeed, in many ways this looks like the best economic recovery in many decades.

As Max Burns writes, Biden is delivering the fastest economic recovery in history. Why hasn’t anyone noticed?

Democrats are faced with a sticky problem: The economy is nearing full employment after businesses added 210,000 jobs in November, labor force participation climbed to its highest level since the pandemic and wages are rising across many industries. Yet most voters are increasingly pessimistic about President Biden’s economic stewardship.

“I’m not exactly sure why what’s happening isn’t being characterized as a booming recovery from a worldwide shutdown,” Hawaii Sen. Brian Schatz(D) mused in a tweet last month. The answer involves a bit of Democratic over-optimism and a whole lot of Republican [propaganda] messaging – [parroted by the mainstream media] – the Biden administration has been slow to counter.

Schatz is largely right: Under Biden, the American economy has recovered from its Trump-era lows with remarkable speed. Just a year ago, the unemployment rate sat stubbornly at 6.7 percent. Today, only 4.2 percent of Americans are out of work. Similar economic recoveries have normally taken three times as long. The Biden administration is delivering on the fastest sustained economic recovery in American history, yet its messaging struggles to tell that story.

More important for Democrats is that this isn’t a “paper recovery,” where unemployment rates fall because more Americans simply give up looking for work. Much to Democrats’ relief, the opposite is true for the Biden recovery. The labor force participation rate, the percentage of Americans 16 and older who are working or actively looking for work, just hit pre-pandemic levels. That’s a hugely reassuring development for analysts who initially feared the global pandemic would be a drag on the labor force rate for years to come.

But a surging economic recovery doesn’t mean that all is well for regular Americans, and if Democrats want to make jobs and the economy a 2022 campaign issue, they’ll need answers for some of the recovery’s potholes. Chief among them? Inflation.

* * *

Republicans want voters to think of their economic gains as temporary and the inflation pinch as permanent. They get the story exactly backwards. That hasn’t stopped some conservative outlets from crafting the bogus narrative that inflation is a result of Democratic spending priorities — not a side effect of an economy rapidly expanding after a year with its head held underwater. They also fail to mention that wages recently rose by the largest amount in two decades, and American workers will still be pocketing those gains when our post-coronavirus economic supercharge wears off and inflation drops back to regular levels.

* * *

At this point, only Biden has the bully pulpit necessary to contain the jitters overtaking his party’s “centrist” [corporate Democrats] lawmakers. Instead of focusing on the numbers, Biden should play to his strengths by connecting each element of the economic recovery to the stories and lived experiences of real Americans the recovery is helping.

It isn’t enough to quote charts at Americans who think the economy is worse than it was a year ago — Democrats must show them how the Biden administration has stewarded one of the most impressive economic turnarounds in recent memory. Biden’s knack for one-on-one connection is an asset to humanizing Democrats’ economic message, but only if the party has the courage to counter months of unchallenged Republican disinformation.

America’s rapid-fire economic recovery is a historic event. It’s time Democrats treated it like one worth celebrating.

Krugman continues:

Yet consumers appear to be feeling very downbeat — or at least that’s what they tell surveys like the famous Michigan Survey of Consumers. And this perception of a bad economy is clearly weighing on President Biden’s approval rating. Which raises the question: Are consumers right? Is this a bad economy despite data showing it as very good? And if it really isn’t a bad economy, why does the public say it is?

Just to be clear, I genuinely want to know the answer to these questions. I don’t think it’s a crude case of “people are being lied to by the corporate media,” although if you ask me, it’s silly when people in the media get all huffy over any suggestion that how they report on the economy has an influence on public perceptions. (If it doesn’t, why do they bother?)

So what is going on? Let’s start with the obvious culprit, inflation, which is indeed running hotter than it has for decades.

Rising prices have certainly eroded many workers’ wage gains, although real personal income per capita is still above its prepandemic level even though the government is no longer handing out lots of money. And my sense is that inflation has a corrosive effect on confidence even when incomes are keeping up, because it creates the perception that things are out of control [i.e., inflation psychology.]

That said, surveys about inflation also illustrate the point that when you talk to consumers, the questions they answer may not be the ones you thought you were asking. It’s a longstanding observation — almost a running joke — that the “expected inflation” number from the Michigan Surveys is, in practice, basically the price of gasoline.

Note: Biden asks for probe of potential ‘illegal conduct’ on gas prices: President Biden asked the head of the Federal Trade Commission (FTC) to look into whether oil companies are illegally increasing prices as consumers face high costs at the pump. “The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately,” Biden wrote in a letter to FTC Chairwoman Lina Khan. “The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” the president wrote.

So what question are people really answering when asked about the state of the economy? One clue is that there’s an incredible amount of partisan skew in the responses. Republicans say, bizarrely, that current economic conditions are much worse than they were in March 2009, when the economy was losing 800,000 jobs a month.

Another clue is that you get very different answers when you ask people “How are you doing?” rather than “How is the economy doing?” The Langer Consumer Confidence Index asks people separately about the national economy — where their assessment is dismal — and about their personal financial situation, where their rating is high by historical standards. The Michigan Surveys don’t ask quite the same questions, but they do ask people how their current financial situation compares with five years earlier; 63 percent say they’re better off, the same number as in September 1984, just before Ronald Reagan won an electoral landslide with claims that it was “morning in America.”

Aside from looking at what people say, surely it makes sense to look at what they do. If consumers are really as depressed as the sentiment numbers say, why are retail sales running so high?

And if we turn our attention from consumers to businesses, what we see is a huge surge in capital expenditures. That is, businesses are investing as if they see a booming economy and expect the boom to continue.

In short, the public’s highly negative assessment of the economy is at odds with every other indicator I can think of. Again, what’s going on?

As I said, part of the answer is probably that inflation unnerves people even when their incomes are keeping up. This may be especially true when there are big increases in the cost of filling one’s gas tank, a cost that has psychological salience far larger than its 4 percent weight in the Consumer Price Index.

Partisanship is also definitely a factor. Two-thirds of Republicans believe that the 2020 election was stolen; how much of a stretch is it for them also to believe that the Biden economy is terrible, whatever their personal experience?

Finally, as I also said, it’s implausible to assert that the tone of media coverage is irrelevant. It’s not even necessarily a partisan thing. My world is full of economic commentators who have spent years eager to moralize about the evils of inflation and who were bitterly disappointed when their hoped-for disaster failed to materialize a decade ago. Now they have their chance, and they’re surely having some effect on public perceptions.

So it’s important to keep perspective. This is actually a very good economy, albeit with some problems. Don’t let the doomsayers tell you otherwise.

I will take exception to Krugman saying “I don’t think it’s a crude case of ‘people are being lied to by the corporate media.'” Yes they are, professor. (He does write for the New York Times with the hysterical headline today).

Media critic Eric Boehlert writes at Press Run, New poll confirms media are burying us in bad economic news:

By a staggering ratio of six-to-one, Americans say they are seeing and hearing bad economic news more often than they are positive reports. The new polling results confirm the deep disconnect the media have constructed, as news outlets stress. discouraging news regarding the Biden economy, while often ignoring or downplaying the cascading positive developments.

Still committed to the GOP-friendly — and fictitious — storyline about a U.S. economy in decline, the press is damaging President Joe Biden’s approval rating by painting a false portrait of America.  It’s doing the Republicans’ bidding — and the messaging is working.

Recently asked in a YouGov poll if they had “heard mostly positive or mostly negative news stories about the economy,” 48 percent of Americans said “mostly negative,” and just 8 percent said “mostly positive.” (28 percent said both negative/positive, and 16 percent said they hadn’t heard much about the economy at all.)

Those results are stunning, considering how many positive economic developments are being generated. Just in recent days we’ve learned that gas prices will soon be falling, wages are hitting record heights for workers, and that weekly jobless claims haven’t been this low since Jimi Hendrix played at Woodstock. [See, Jobless claims fall to 52-year low as layoffs decline: “First-time unemployment claims dropped to 184,000 last week, a drop of 43,000 from the previous week and the lowest since September of 1969,  the Labor Department said Thursday.”]

Yet for most Americans, there’s only one economic story being told — a doomsday one.

The YouGov polling results come in the wake of a new media study that shows Biden is getting worse coverage than Trump did one year ago.

That nonstop stream of downbeat economic updates today has clearly influenced respondents in other ways. When asked “Which do you think is a more important problem facing the U.S. today,” just 9 percent said unemployment, where the news was been consistently good this year, but has often been underplayed by the press. By contrast, 42 percent said inflation was the most important problem, a topic that the media have hyped without pause for nearly two months echoing Republicans’ loud, doomsday attacks on the Biden economy. (Remember that weird CNN milk story?)

“The nonstop hype of “inflation, inflation, inflation” unsurprisingly leads many people to believe inflation is a really big problem, even if their own finances are pretty good, because they hear all those wise reporters at CNN, NPR, the NYT and elsewhere telling them it’s a really big problem,” notes economist Dean Baker [i.e., inflation psychology.]

A new Associated Press poll confirms Baker’s claim. The headline: “Income Is Up, But Americans Focus on Inflation.” Why is that? Probably because Americans are inundated with the media’s obsessive inflation coverage.

It’s a “political nightmare for Biden,” CNN recently stressed, while the New York Times published well over 100 articles and columns that mentioned “inflation” three or more times last month. The Washington Post announced inflation is the “defining” challenge of Biden’s presidency. Why inflation? Because the press decided.

The reason inflation has sprouted in the U.S. is because consumer demand is booming as the economy has recovered from Covid faster and stronger under Biden than most people ever thought possible. That silver lining rarely gets mentioned, though.

Contrast the inflation coverage with the unemployment coverage. In the YouGov poll, asked what today’s unemployment rate is, just 3-in-10 Americans could give an accurate response; approximately 4 percent. Nearly 4-in-10 thought the rate was above 6 percent. (17 percent thought the U.S. unemployment rate was 10 percent or more.) Just one-in-three knew that the rate decreased last month. Would more Americans have a better idea about today’s improving unemployment picture if the press more accurately covered it? Yes.

When the October blockbuster jobs report was released showing nearly 550,000 positions created that month, and that revised estimates for September and August confirmed an additional 235,000 jobs had been created, “NBC Nightly News” that night made no mention of that fact. But when the November jobs report came last week out and showed a “disappointing” 210,000 jobs added, “NBC Night News” slotted it in as the day’s third most important story.

Last Friday, National Public Radio announced the 210,000-jobs report was a “bust” even though the unemployment rate tumbled from 4.6 percent to 4.2 percent in just 30 days. And prior to Biden passing the Covid relief bill last winter, the CBO predicted it would take until 2025 for the U.S. to reach an unemployment rate of 4.2 percent. For NPR listeners though, the economic news last week as a “bust.”

This was all before Pfizer and BioNTech announced that initial lab studies show that a third dose of their Covid-19 vaccine neutralizes the looming Omicron variant, which the press had been hyping as a possible grenade targeting the U.S. economy.

On Wednesday, the White House tweeted out an economic update: “The economy has added 5.9M new jobs since January — the most jobs added in the first 11 months of a year. Since January, unemployment has fallen from 6.3% to 4.2% — the fastest single year drop. 16M fewer people are receiving unemployment since POTUS took office.”

That’s not spin, those are the facts. We’re witnessing the Biden Boom. So why are news consumers being buried with bad news?

For more on the Biden Boom, see Robert Shapiro’s excellent new piece in Washington Monthly:

Based on the data, President Biden and the Democratic Congress are set to preside over the strongest two-year performance on growth, jobs, and income in decades—so long as the current cycle of inflation eases, and the Omicron variant does not trigger another round of shutdowns. The future paths of inflation and the pandemic are large and important unknowns—but if they break right, everything else points to a Biden boom through 2022.