Pitchfork Economics with Nick Hanauer

Setting the record straight on inflation (with Mike Konczal)

Oct 3, 2023

Economist Mike Konczal from the Roosevelt Institute sets the record straight on inflation, explaining the causes behind the recent decline in prices. The podcast explores the impact of inflation on American families, controversies surrounding the target inflation rate, and the role of the Federal Reserve. It also discusses stock buybacks, low productivity, hopes for economic recovery, and the need for fiscal policy in controlling the economy.

50:32

Episode guests

Mike Konczal

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Episode notes

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Quick takeaways

Higher prices in the economy are a result of global supply chain shock, not inflation.

The decline in inflation is primarily driven by supply side expansion and normalization of supply chains.

Deep dives

The Impact of Supply Chain Shock on Inflation

The podcast episode discusses how higher prices in the economy are a result of a global supply chain shock rather than inflation. The speaker argues that the distance between income and necessary spending is narrow for most American families, which makes higher prices a significant challenge. The conversation highlights the misconceptions around inflation and criticizes the policy prescriptions that advocate for throwing workers out of jobs as a solution. It emphasizes that the supply side expansion and the normalization of supply chains are the primary drivers of the decline in inflation.

Introduction

2min

Understanding the Impact of Inflation on American Families

20min

Controversy Surrounding the Target Inflation Rate

8min

Stock buybacks, low productivity, and hopes for economic recovery

4min

The Role of the Federal Reserve (Fed) in Inflation and Unemployment

8min

Addressing Decision-Makers' Lack of Personal Stake and Considering Alternative Levers

2min

The Limitations of Monetary Policy and the Need for Fiscal Policy

7min

There have been a lot of bad takes on inflation out there in the media, from wild speculation about its causes to absurd predictions about when and how the wave of price increases would finally come to an end. But now just about everyone agrees that after two years of rising prices, inflation has finally slowed down. And while there’s still a long way to go, the situation is dramatically better now than it was even six months ago. Mike Konczal from the Roosevelt Institute recently did some research into the disinflation we’ve been seeing, and he returns to the show to tell us what’s really bringing prices back down to earth.

Mike Konczal is director of Macroeconomic Analysis at the Roosevelt Institute, where he focuses on full employment, inequality, and the role of public power in a democracy.

Twitter: @mtkonczal

Supply-Side Expansion Has Driven the Decline in Inflation

https://rooseveltinstitute.org/publications/supply-side-expansion-has-driven-the-decline-in-inflation

How Goldilocks Came to the U.S. Economy https://www.nytimes.com/2023/09/11/opinion/inflation-unemployment-phillips-recession.html

Pre-Order Nick's new book, Corporate Bullsh*t https://www.corporatebsbook.com

Website: http://pitchforkeconomics.com

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Nick’s twitter: @NickHanauer