ABC Eager to Sound 'Stagflation' Warnings

Photo of Jeff Poor.
By Jeff Poor | February 27, 2008 - 19:47 ET

Nothing like the cheery decade of the 1970s - disco dancing, "Animal House," Farrah Fawcett and the buzz word reincarnated by the media - stagflation.

After a disappointing spike in inflation, the producer price index (PPI), by 1.0 percent in January, and a rise in core inflation (with food and energy costs excluded), rising 0.4 percent on Tuesday, the media have deemed it necessary to sound the stagflation siren.

"Now, to the economy," ABC "World News" anchor Charles Gibson said. "And a word not heard since the 1970s - stagflation. That occurs when prices go up just as the economy slows down - stagnation plus inflation. And the government that wholesale prices shot up 1 percent in January and are now up almost 7.5 percent in the past 12 months."

Story Continues Below Ad ↓

Although economic growth has tapered off, from 3.9 percent in the third quarter of 2007 to forecasts of 0.6 percent in the fourth quarter of 2007 - stagflation takes time to develop according to Brian Wesbury, an economist for First Trust Advisors, L.P.

"Let me just put it this way, stagflation comes from the 1970s," Wesbury said on CNBC's February 21 "Power Lunch." "A lot of people throw this word around. They don't know what they're talking about. It takes a long time for stagflation to develop. It was because every time the economy kind of faltered in the 70s, we cut interest rates, like we just did, and that drove inflation higher. And then, when we raised interest rates to kind of fight inflation, that hurt the economy - then we cut interest rate really fast again."

"Just today, oil set a record high - a barrel of crude at just over $100," ABC correspondent David Muir said. "And what so worries economists, is that potential dynamic - stagflation."

Comments Policy

All comments are owned by whoever posted them and are subject to our terms of use. They should not be assumed to represent the views of NewsBusters.

Viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Stagflation

I always thought that stagflation meant high unemployment and high inflation rates combined with decreasing productivity and income. Since unemployment is so low, as is inflation (a 1.4 percent increase in prices isn't what I'd call high. 14 percent or more, now that's high!), I wouldn't describe our economy as in stagflation, especially when compared to the economy of the 70's. But then again, I'm not a MSM economist.

Are you thinking of the

Are you thinking of the "Misery Index"? Whatever, once Obama gets in, I'm sure we won't hear or see those ugly terms mentioned by the MSM again. It's that "Obama Magic" at work...

Chris... ROFL... ...yeah

Chris...

ROFL...

...yeah that old black magic works everytime...oops I'm not being PC enough I would guess for some..heck you can't even use popular phrases anymore if they PC police have their way.

BT, like McCain, I distance

BT, like McCain, I distance myself from your comment. :)

Distance isn't far enough . .

 . . .and I'll apologize.

Now I am really laughing

Now I am really laughing out loud....

Needed that...thanks guys...

My fellow Democrats - er -

My fellow Democrats - er - Republicans, I don't know this woman, "bigtimer". Who is she, anyway? I have only the utmost respect for Senator B. No Middle Name O. :)

How about That O-bama

How about

That O-bama magic has me in its spell...

That O-bama magic that you weave so well......

 

Misery Index

Misery Index = Inflation plus unemployment.

I can't believe that I forgot about the Misery Index! Has it really been that long?

It has been a long time - I

It has been a long time - I - uh - read about it - yeah, that's the ticket. Jimmy Carter coined it and then was hoisted up on it.

THE MSM CAN'T HIDE THE FACTS ANYMORE...

 Oh, I'm not just thinking about the "Misery Index", if Obama is elected, it will be more then that. I agree with Glenn Beck & John Gibson, they have said that Obama is Jimmy Carter...a better looking, better spoken, version of Carter, & he does'nt bore you to death with his speeches.

He will be the 2nd coming of America's 39th President, his policies will hurt the nation as a whole, & it would be interesting to see how the media would react to Obama if he gets elected & flames out as badly as Carter did. Would we be hate mongers for pointing out that he tanking the USA? Would we be racist? I know what the answer will be early on, but for how long?

Here's the deal, how long would it take for CONSERVATIVES (not Republicans)to come get it together to stop him? 2 years? 4 years? Never? The other thing is who would be his advising him? I've seen Mika's father, Former Natl.Sec.Advisor, Zbigniew Brzezinski is helping him out. He was a disaster, & I don't want to see the results of the others who will have Obama's ear. President Obama would be great for the Conservative movement, but at what cost to the nation? The War On Terror, The Border, Health Care, Supreme Court nominations, other court appointees, & this is a small part of things he will be able to use to damage America. I'm afraid we stand a good chance of finding out.

 

"Some of us are wise, some of us are otherwise"  Mark Levin

GOP missing opportunity to pin economic problems on Dems

Unfortunately, the Republicans aren't smart enough to point out that this allegedly sour economy developed under the first Democrat Congress in 12 years, the one that could hardly pass a budget (in fact, if my memory is correct, all they could do was pass a continuing resolution). Nor are they smart enough to explain that the Dems' presidential candidates are offering exactly the wrong answers to the problem.

When you put the clowns in charge, don't be surprised when a circus breaks out.

nkv... That's because

nkv...

That's because modern day Republicans have lost their spines.

You've got that right,

You've got that right, viking!!

If Republicans were in power right now, every single comment by the Democrats would include the words "this Republican-led Congress."

Isn't it funny how when things are bad under Republicans, it's a political problem; when they stink under Democrats, it's "market forces" over which they have no control?

 

They talk about a 70's word.....

 stagflation(I wasn't born yet but have read what it means) that isn't even actually occuring with our country. But they are ignoring the real reasons inflation is occuring.

Lets see you MSM government educated idiots(not you NBers):

Ethonal- farmers are rapidly selling thier corn and other ethonal producing produce to oil companies. Why? Because they are government mandated to include 10% ethonal in all gasoline now. You also can not count out E85(which is also now being produced in more and more quantities). All because global warmers want to feel good. Yet they ignore the facts that ethonal produces more CO2 than regular diesal and gasoline. This is also on top of the fact that CO2  is not a pollutant. Since oil companies can spend more on corn and other produce the farmers of course are going to sell it to them rather than food companies. So to compete food companies must increase prices to buy the produce. Add this to higher transportation costs and <poof> inflated grocery prices. Do you think grocers and manufacturers are going to aborb the costs? NO, you the consumer will and are going to do so.

Taxes- I can't speak for other states but  here in VA we pay Fed income tax, State income tax, plus the other payroll taxes, state vehicle inspection fees, double vehicle registration fees, property taxes on the remaining value of your vehicles every year, inflated real estates taxes, sales tax, restaurant taxes(yes as consumers, and no even if you get food to go you  pay), city tax in the form of a sticker you put on your car(funny thing is they discontinued the sticker but still require you to pay every year), luxury tax on toiletry items(virginians look closely at your receipts), and utility taxes. There are more but I think you get the picture.

Mortgage crisis- I particularly love this one. Lenders were pretty much forced into making subprime loans to people who otherwise would never qualify by special interests groups and now these people can't pay. Not to mention the idiots who don't read what they sign(or ignore the attorney or broker that is required to be present by law at closing) on loans such as 3 or 5 year ARMS or interest only loans. This is not a crisis...this is the industry cleansing itself of morons and overspenders. They get what they deserve.

Credit crunch- when you have a slew of generations that don't  understand that real cash is needed to pay off that magic plastic in thier wallets you get high debt and what is occuring right now. This is just the light shining on government education. Nuff said.

Oil/Gas- lets see OPEC sets prices...OPEC sees that demand is high-->price of oil goes up...hmmm seems like the system works to me. Libs are preventing the US from drilling for its own oil which would put us at the top of oil producers in the world, which in turn would get us a main voice at/in OPEC, which would influence prices, not to mention that world inventory would go up....which would drop prices on its own. The libs would never go for that though. Instead the government could easily drop taxes on gas..which would drastically reduce gas prices but the libs won't do that either.

The fear mongering caused by the lack of information put out by the media is causing a problem. Coule this with the constant crying of wolf...and you get what we have today. Limbaugh used a good poll yesterday 86%  of the people surveyed believed that we are in and economic crunch, but when asked about themselves less than 42% said they were affected personally...which means the media has people scared into this mess.

 

 

“Were it left to me to decide whether we should have a government without newspapers or newspapers without government, I should not hesitate a moment to prefer the latter”  - Thomas Jefferson

state of fear

The media has developed an effective state of fear.  A population that fears the future is easier to control, and keep tuned in to your lies.

The question becomes, when is the media telling us the truth?  We truly live in the disinformation age, and it has become harder than ever to discern the truth from lies.

I always thought it was

I always thought it was hunters stretching the truth about how many points their buck had, you know Stag inflation.

Nuke em til they glow then shoot em in the dark.

LOL

now *that's* comedy!:)

as long as they're not referring to the process by which the "stag party" joke inflatable sheep is prepared...

 

"to call an illegal immigrant an "undocumented alien" is the same as calling a streetcorner drug dealer an "unlicensed pharmacist".