Here's a headline from today's Wall Street Journal:
Is Inflation a Risk? Not Now, but Some See Danger Ahead
You've probably seen variations of this dozens of times in the past few months even though all the evidence suggests that inflation is well under control. But here's a headline you'll never see:
Is Unemployment a Risk? Not Now, but Some See Danger Ahead
Here's a question for the class: Why is the top headline so common but the bottom one so rare? Hmmm?
[waves hand wildly] Wait, wait, I know! [stands awkwardly, looks at feet, clears throat, raises eyes, recites robotically] America's Job Creators know best what is good for The Economy, and what is good for The Economy is good for America! [beams wildly, looks around for approval]
You get a gold star!
😉
Because headline writers and their bosses are not unemployed, but are always concerned about inflation eating into their paychecks in an era of stingy raises?
We could be in the depths of the worst depression ever and "some" would still be seeing inflation danger ahead. I heard this a couple days ago from a perennial scare-monger on YouTube, "Right now inflation isn't a problem, but there are signs that it is around the corner." Ugh
Today we are all Eric Forman streaking in front of Gerald Ford.
We always see these headlines because a lot of people and companies (= advertisers) still make money off selling dubious financial products, such as gold or bitcoin, to individual investors as a "hedge" against "runaway inflation" that is just around the corner due to "out-of-control" government spending.
Perhaps some of the mysterious power of inflation worry stems from seeing the effects of hyperinflation. And not just in the past (ie Weimar Republic) but in rather more contemporary times - Zimbabwe and Venezuela. Inflation is something everyone can see/perceive whether they are employed or not. Unemployment remains abstract and distant to the employed and retired.
Correction: This is not "our" obsession. It is the obsession of a certain sort of "elite".
The obsession hasn't become worse, it has been there for decades, since the late 60's. What is comical is how economists think that the Fed has the power to stop inflation if it should kick up by raising interest rates. When inflation hit its peak of 14.6% in 1980, federal funds was at 17.6%, having been steadily raised for about three years. How could that be considered success?
But Kevin is right that those who are worried about possible "overheating" are on the wrong track. Here is Nobel-prize economist Joseph Stiglitz:
https://www.cnn.com/2021/02/23/perspectives/stimulus-biden-covid-relief-joseph-stiglitz/index.html
One clear distinction between inflation and unemployment is that inflation directly affects everybody. Unemployment directly affects only the unemployed.