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How to Interpret Next
Week’s Inflation Numbers
When the
latest inflation numbers come out on April 13, they’ll look a bit
higher than usual, and opponents of the American Jobs Plan are likely
to pounce.
Don’t be fooled.
As Roosevelt’s Mike Konczal, J.W.
Mason, and Lauren Melodia explain in a new blog post, those
high-on-paper figures won’t be what they seem.
“. . . for the next several months,
the conventional [year-over-year] YoY measures of inflation will be
comparing today’s prices to those of the depression-level COVID
lockdown, when official unemployment was near 15 percent,” they
write.
That means the annual inflation
rate revealed next week will reflect deflation in 2020 rather than inflation in
2021.
“Anyone who wants an objective
assessment of economic reality, either in reporting or policy
conversations, will need to correct for this distortion. If a
seemingly big spike in . . . YoY inflation is misunderstood as a sign
of rising prices today rather than of falling prices a year ago,
debates over the American Jobs Plan and future infrastructure
proposals could go off the rails,” they argue.
Read on for three
reasons next
week’s inflation numbers are a bad argument against infrastructure
investment.
And for more from Konczal,
listen to this week’s episode of Pitchfork
Economics,
which includes an interview about his new book, Freedom
from the Market: America’s Fight to Liberate Itself from the Grip of
the Invisible Hand.
A Fair
Share
In a Wall
Street Journal op-ed this week,
Treasury Secretary Janet Yellen called for “a more effective global
minimum tax” so that “corporations can’t shift profits around the
world to minimize their tax bills”—an essential step for global
fairness, as Roosevelt Fellow Darrick Hamilton explained
on Democracy
Now!
“Another way to conceive of this
is, think of it as not only an industrial
policy, but even a
trade policy through tax reform, to make sure that we have fair
standards, when we think about ways in which nation-states engage
across borders,” he told hosts Amy Goodman and Juan
González.
Yellen’s pitch builds on the Biden
administration’s broader
plans to increase
corporate taxes, which could “reshape US politics,” as Roosevelt
Director of Governance Studies Todd Tucker writes in a
Washington
Post op-ed.
"President Biden’s measure would
raise $2.7 trillion over 15 years, nearly half of which—$1.2
trillion—would come from increasing the statutory corporate tax rate
from 21 percent to 28 percent. While this would put business taxes at
only half the peak
rate levied in the 1960s, it would still be the
biggest tax hike on business in US history that’s not related to
funding war." Read
more.
 Catch Up
Earlier this week, Roosevelt hosted How
to Achieve a Climate-Forward Recovery, in
which moderator Rhiana
Gunn-Wright and speakers
Brandon
Hurlbut, Lenore
Palladino, and John
Washington discussed what the Biden
administration's economic and infrastructure plans mean for climate
change and environmental justice.
“If you don’t deliberately think
about equity, and design policy so that the outcomes are more likely
to be equitable, then it’s just not going to happen. And I think it’s
very similar with climate . . . Including climate continually in the
plan for economic recovery and in the ways that we think about
economic policy is incredibly crucial,” said Gunn-Wright.
Watch the webinar
now.
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