Good morning. Inflation is up, and Americans are mad. But it's not a simple story. |
 | | A gas station in Los Angeles.Philip Cheung for The New York Times |
|
Paul Krugman, the economist and Times Opinion columnist, asked an intriguing question last week: Why are Americans so upset about inflation? |
Inflation usually creates some dissatisfaction, of course. When price increases exceed wage increases, it means that the effective pay of most families is falling. That has happened in the U.S. over the past year. |
It's partly a reflection of rising inflation around the world. Prices have increased because Covid-19 disruptions have reduced the supply of many goods while government stimulus programs have put extra money into families' bank accounts. More demand plus less supply equals higher prices. |
But inflation is especially high in the U.S. The main reason is probably that this country spent more money on pandemic stimulus than many other countries. A second reason is that daily life here remains more disrupted than in much of Europe or Asia. |
 | | Chart shows year-over-year change. | Source: U.S. Bureau of Labor Statistics; O.E.C.D. |
|
Yet even with the highest inflation rate since the 1980s, the U.S. economy is functioning pretty well in other ways. Work is so plentiful that many people are quitting their jobs for better ones. Thanks to the stimulus money and rising home values and stock prices, most families are better off financially than when the pandemic began. Child poverty has plummeted. Lifesaving vaccine shots are universally available. |
As Krugman noted, an inflation rate that exceeds wage growth does not automatically make Americans grumpy. In both 1984 and 1988, when Republicans held the White House, inflation was also eating up wage gains. "Yet, Republicans won both elections by large margins by running on the economy," Krugman noted. They were able to do so because economic confidence was high. |
 | | Source: Gallup |
|
Krugman suggests that the main reason is a national narrative, coming mostly from the media, that focuses on inflation and ignores the economy's strengths. And I don't doubt that this negative narrative plays a role in the country's dissatisfaction. As regular Morning readers know, I agree that we in the media have a bad-news bias. |
But I would be surprised if a media narrative were the full story. What else might explain the dissatisfaction? Even if you forget about inflation, the experience of living and working in the U.S. economy is often unpleasant right now. |
Among the problems: Public buses and subways are unreliable, mostly because of Covid absences, lengthening commutes. School buses and after-school activities are unreliable, creating child-care gaps. Grocery stores are routinely out of items. Retail lines are long. Doctor's appointments can be hard to get. |
In coming months, inflation is likely to decline. Much of the pandemic stimulus is expiring, and the Federal Reserve will be raising interest rates, as several top officials emphasized yesterday. The Biden administration is also taking steps to increase the supply of goods. It has encouraged ports to remain open and tried to increase the pool of truck drivers, by expanding apprenticeships and reducing licensing wait times. |
"We are working aggressively with the private sector to increase throughput in the ports, and we're posting real results," Jared Bernstein, a member of the President Biden's Council of Economic Advisers, told me. "A key part of that is our trucking action plan, to improve the quality and quantity of those jobs." |
Still, it remains unclear how far inflation will decline this year. "It's a very difficult problem for them to address," my colleague Ana Swanson, who covers economic policy, said. Some economists have pointed out that inflation is now so high that it could decline in coming months while remaining uncomfortably high. |
Ultimately, I think it makes sense to think of inflation not as a narrow economic problem but as part of something larger. American life remains highly abnormal because of the pandemic's disruption to daily life. By many measures — mental health, suicide attempts, blood pressure, violent crime, vehicle crashes, student learning — society is not functioning very well. An inflation rate high enough to shrink paychecks is another item on that list, and hardly the most important one. |
No wonder most Americans have grown frustrated, including with Biden. People's living standards and even physical well-being are suffering. A disproportionate toll is falling on low-income families and children. |
In a Monmouth University poll released yesterday, 70 percent of Americans said they agreed with the statement, "It's time we accept that Covid is here to stay, and we just need to get on with our lives." A growing number of governors, from both parties, seem to agree, The Times reports. "The emergency is over," Colorado Gov. Jared Polis, a Democrat, has said. |
But none of this means that there are easy answers, at least not until cases have fallen well below their current level. About 2,500 Americans are still dying of Covid every day, mostly — but not entirely — because of the large remaining number of unvaccinated Americans. |
Pretending that Covid has disappeared has costs, to people's livelihoods, happiness and physical well-being. And allowing Covid to continue dominating everyday life has costs, to people's livelihoods, happiness and physical well-being. The only realistic option is to balance the two and look for a path that minimizes the human damage. |
 | | Donald Trump at a rally in Texas over the weekend.Meridith Kohut for The New York Times |
|
A subscription to The New York Times plays a vital role in making this in-depth reporting possible. Consider supporting us by becoming a subscriber today. |
 | | Rihanna and A$AP Rocky in Harlem.Diggzy/Shutterstock |
|
Street style: The celebrity pregnancy photo shoot has evolved. Its new winning entry? Rihanna. |
Lives Lived: Maj. Gen. John Singlaub waged clandestine warfare for the Army and the C.I.A., then retired under pressure after criticizing Jimmy Carter. Singlaub died at 100. |
 | | From left, Hiwote Getaneh, Eleanor Kagan, and Jessie Baker, producers of "This Is Dating."Timothy O'Connell for The New York Times |
|
Dating shows have been a television staple for decades, from the 1965 premiere of "The Dating Game" to "The Bachelor" and its spinoffs. Now, two podcasts — "This Is Dating" and "It's Nice to Hear You" — are reimagining the matchmaking format for audio, Reggie Ugwu writes in The Times. |
"This Is Dating" follows four people looking for love. A dating coach guides them, and producers select candidates based on the dater's preferences. Listeners follow the four on multiple first dates, conducted over Zoom. (The contestants use real voices and fake names.) The effect is something like eavesdropping. |
"It's Nice to Hear You" takes cues from shows like "The Dating Game" in which contestants get to know their prospective partners without seeing them. It follows three couples who correspond once a day for 30 days via voice memo, without exchanging photos or other identifying details. "You're not being distracted by what someone looks like or what's in their background," Heather Li, the show's creator, said. "I think it's harder to prejudge someone if you don't have as many data points." |
 | | David Malosh for The New York Times |
|
In "Eating to Extinction," the BBC journalist Dan Saladino argues for the importance of food diversity and showcases treasures we risk losing. |
The pangram from yesterday's Spelling Bee was talkative. Here is today's puzzle — or you can play online. |
Thanks for spending part of your morning with The Times. See you tomorrow. — David |
P.S. The Times bought Wordle, the sudden hit game, for a seven-figure sum. |
Claire Moses, Ian Prasad Philbrick, Ashley Wu and Sanam Yar contributed to The Morning. You can reach the team at themorning@nytimes.com. |
|
No comments:
Post a Comment