CNN gave viewers a sort of Saturday morning fever as CNN’s Andy Serwer raised fears of stagflation sapping the economy’s strength on the June 17 “In the Money.” “Stagflation” is a term coined in the 1970s to refer to high inflation coupled with a weak economy.
Two days earlier, Serwer suggested on CNN’s June 15 “American Morning” that the economy was already in such a state. Inflation at an annual rate of 3.8 percent, “the highest rate in 11 years” and an economy “that’s not particularly firing on all cylinders,” raises “the specter of stagflation,” Serwer warned.
Serwer took to the disco floor again Saturday morning.
“Hey, Scott, we’re starting to hear a real ugly, scary word on Wall Street being bandied about, and that’s stagflation,” Serwer informed Scott Wren of investment firm A.G. Edwards. The Fortune magazine editor pointed back to “dire consequences” in the 1970s and asked Wren what the chances are of stagflation hitting the economy now.
“I think stagflation, at this point in the cycle, always comes up, I mean, you’re just waiting for people to use that word,” Wren replied, but “the ’70s were a heck of a lot different than what we’re seeing now.”
Instead, Wren added, he expects “sustainable, modest earnings and economic growth” in 2006 and 2007.
Serwer’s inflation fever is no new fad. In October 2005, the Business & Media Institute recorded how Serwer agreed with colleague Miles O’Brien’s rhetoric about rampant inflation.
“For the second day in a row the stock market took a drop,” O’Brien intoned on the October 6 “American Morning.” “And I think it’s – what do we need, those ‘Whip Inflation Now’ buttons, maybe.” Serwer agreed, adding, “Back to the ’70s. Turn your thermostat down, get your cardigans out.”
The Business & Media Institute has studied how the media push fears of inflation when consumer prices rise modestly, but fail to take notice when prices are stable.
