I’m not so concerned about the generally wacky, anti-fact beliefs of conservatives. The much bigger problems come from the assumptions of the mainstream press when it comes to economic issues. It is there that we get the unquestioned framing of the oligarchs. Take for example, the inflation target of the Federal Reserve. A few decades ago, a four percent inflation target was considered just fine. Now it is two percent. In Europe it is “less than” two percent. And the actual inflation in this country is more like 1%. Moderate inflation is good for employment. But low inflation is good for the owners of capital. So what do we get? The inflation that hurts workers and enriches the already rich.
The Fed is supposed to have a dual mandate: keep inflation low and employment high. But in practice, they keep inflation low and don’t much worry about employment unless things are so terrible that the unemployed are coming at them with pitchforks. I never get tired of Matt Yglesias’ remark about this, “If the unemployment and inflation rates were reversed, would the Fed do something about it?” It’s a rhetorical question, because we all know that it would. We can’t allow the bonds of the rich to decrease in value!
Dean Baker highlighted the way that the media frame this, The IMF’s Data Disagree With the NYT on the State of Russia’s Economy. The New York Times published an article, Russia Economy Worsens Even Before Sanctions Hit. You may well have already heard about the terrible Russian economy. Such stories have become a genre. But there isn’t much too them.
They all depend upon the idea that inflation is the worst thing for an economy. Russia has moderately high inflation—currently 6.2%. But this is not disastrous—even for the rich bond holders. But it is apparently pretty good for workers. The unemployment rate in Russia is currently 5.4%. So things are no so bad for Russian workers, but according to the Times, things are bad in a general way because bond holders aren’t making as much money as they think they should.
What’s more, Baker noted that the inflation rate has actually improved:
So things have improved in Russian since 2008 and unemployment is low. But the media define this as a bad economy because the oligarchs don’t think they are making enough money. There is “objective” American journalism!
