But it has political consequences. The inflation argument dovetails neatly with the argument for government austerity. The deflation one tends to call for more government intervention.
Surely The New York Times is reading its own bloggers Paul Krugman and Catherine Rampell. If it’s not, here’s a couple of posts it should print out and tack up around the business desk (as should the WaPo and the LAT). Rampell has this chart, that shows the disinflation trend:
And here’s what Krugman says:
But I have a question here: why do economic forecasters keep predicting a near-time rise in core inflation, even though they are also predicting high unemployment?
I don’t really understand this, except as a fundamental unwillingness to face up to the Nipponization of the US economy.
And try an (admittedly imperfect) thought experiment: What kind of play would you give the story if core inflation hit the highest level in fifty-seven years?
Thanks for continuing to flag this stuff, Ryan. That LA Times gas prices story isn't the only one they've done warning of inflation -- see this Nov. 10 piece hyping fears about rising commodity prices:
http://articles.latimes.com/print/2010/nov/10/business/la-fi-commodity-prices-20101110
Read far enough in, and you see that overall inflation for food prices is projected at 0.5 to 1.5% this year, and is projected to skyrocket to 2 to 3% next year.
#1 Posted by Greg Marx, CJR on Fri 19 Nov 2010 at 04:26 PM
Inflation... deflation... neither is good news for the U.S. economy or for the rest of the world. As an avid research and survival enthusiast, it's time we prepare for the future, all of this bad news surfacing daily is only leading up to a very dire situation. Check out http/survivalist-hub.blogspot.com/ for information on preparedness and http://www.gearupcenter.com for related survival products. Inflation/deflation is very real and is on its way. I see food and clothing prices beginning to rise and its only going to escalate rapidly. My suggestion: Purchase your "emergency products” such as survival food and freeze-dried food NOW, I would also suggest purchasing your clothing and outdoor apparel, some survival gear, survival supplies and even an emergency kit. You just never know what’s going to happen! A peace of mind is synonymous with emergency preparedness! Good luck.
#2 Posted by Tim Ralston, CJR on Fri 19 Nov 2010 at 05:47 PM
It might be instructive to explain why inflation is prioritized over deflation. Ask who does inflation affect, what does it affect, why do so many bankers have a fetish for anti-inflation, why are so many economists unconcerned about labor protection and unemployment?
Think about this and try and come up with some answers. Those answers may give you some insight into why economists and bankers have such a huge blind spot for deflation and other problems related to markets.
Hint, they're using neoclassical eyes to observe an non-neoclassical world. There are some things they just don't see.
#3 Posted by Thimbles, CJR on Fri 19 Nov 2010 at 10:03 PM