As the economy reopens, Fox News tries to turn brief inflation into a major crisis
Economists widely expect inflation to be moderate and temporary, as the economy recovers from the pandemic
As the country reopens and the economy is recovering in the wake of a historic pandemic, Fox’s purported “straight news” personalities are jumping on reports of inflation, attempting to advance a series of talking points to depict a chronic economic disaster — a conclusion that is far too soon to draw as experts largely believe the effect is a temporary step in the recovery itself.
Eric Levitz of New York magazine explained that most of the price increases came from “either from reopening sectors, or from temporary supply constraints in the used-car market.” Now that more Americans have been vaccinated, these sectors have been “caught between surging demand … and inadequate supply,” as it will take some additional time to rebuild.
Already, there may be signs of the inflation abating, as futures prices on lumber are falling from a peak.
And while the Consumer Price Index rose in April by 4.2% from a year earlier, CNBC’s Jeff Cox explained: “One big reason for the acceleration was base effects – at this time a year ago, the economy was hit with the worst of the Covid pandemic and inflation was unusually low. … Year-over-year comparisons are going to be distorted for a few months because of the pandemic’s impact.”
Bloomberg reported over the weekend that the White House is monitoring the situation, and “top advisers detect a growing political challenge from the spike in inflation, even as they see little immediate peril to the economy from price increases that officials expect will last through the rest of the year.”
As for that political controversy, Fox’s hyping of inflation is also a lot like its coverage of the Colonial fuel pipeline shutdown — in which it attempted to depict a single regional event as an overarching national crisis, even after the pipeline was restarted and gas station service was gradually returning to normal. The network is now trying to tie the two themes together.
The experts all predicted inflation — and that it would just be moderate and temporary
For months, Federal Reserve Chairman Jerome Powell has been predicting a brief period of inflation as a stage of the economy’s reopening. In February, Powell told the Senate’s banking committee: “We do expect that inflation will move up. But we don’t expect the effects on inflation will be particularly large or persistent.” Powell reaffirmed this at a Wall Street Journal conference in March, linking the upcoming inflation surge directly to the economy’s imminent recovery.”
Many economists also see the current inflation spell as a temporary product of the recovery. Christopher Waller, a Trump appointee to the Federal Reserve board of governors, said in a speech last week: “Now is the time we need to be patient, steely-eyed central bankers, and not be head-faked by temporary data surprises.”
But over on Fox News, its “straight news” programming has been getting viewers revved up over these immediate speed bumps.
From inflation to communism? Fox anchor says there are “a lot of questions”
On Monday’s edition of The Story, anchor Martha MacCallum spoke with former Housing and Urban Development Secretary Ben Carson, who claimed that inflation was being deliberately pushed for nefarious reasons. Carson suggested that rising inflation represented a deliberate plot to impose communism upon America, and he cited a quote falsely attributed to the late Soviet leader Nikita Khrushchev to make his point.
MacCallum did not challenge Carson on his claim of not being a “conspiracy theorist,” but only thanked him later in the interview and agreed that there are some questions about what is going on: “Well, it's a very interesting perspective and I thank you for sharing it with us. It's very clear that we are not getting the message of can-do spirit and get back to work and start a new business and we're going to make that easier for you. That is not the message that's being sent right now, and there's a lot of questions about why.”
In fact, the economy is “going from standstill to hyperspeed”
On the panel show The Five, Fox Business anchor Dagen McDowell declared, “It just remains to be seen how much people's expectations about inflation changed, because once you expect inflation, that's when those high prices are here to stay for a really long time. I’ll argue that this is Joe Biden's America, and the real-world consequences just showed up a hell of a lot faster than any Democrats expected — just in time for the midterms. That’s why they’re worried — whoops.” (The 2022 midterm elections are about a year-and-a-half from now.)
Fox News political analyst Juan Williams brought some reality to the discussion: The economy is “going from standstill to hyperspeed, and there's going to be turbulence,” while financial markets are continuing to show confidence in the overall economic direction.
Bret Baier and Brit Hume twist the facts
On Special Report with Bret Baier, the anchor kicked off a segment warning of inflation by noting that gas prices were “up to $3.05 from one year ago — significant.” Baier left out the crucial context that gas prices had plunged last year during the pandemic due to the shutdowns in travel and other economic activity and thus prices from 12 months ago are an unrealistic benchmark for comparison with normal years.
Baier then spoke with Fox News senior political analyst Brit Hume, while an on-screen chyron alleged a “Carter Connection” — matching up with Fox’s own repeated narrative that has sought to invoke the global oil shocks and severe inflation of the 1970s. Hume sought to tie the two issues of inflation and the recent gasoline outage— though experts believe the inflation is temporary, while gas outage from the pipeline shutdown is definitely temporary and already winding down.
“People have been worried about inflation for a while. And whether technically in a macroeconomic sense there's inflation, an underlying inflation going on, people are seeing prices rise — and as far as they're concerned, there's inflation,” Hume said. “And of course, this fiasco at the … gas pumps for the last week or more does nothing to help the administration's image in terms of people feeling good about how things are going. So, he says things are going well. In some ways they are, but in some ways they aren't.”