TPM Cafe: Opinion

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For the better part of this year, House Democrats have been consumed by a battle over how best to use their newfound power. One side called for impeachment from the start. The other side insisted that Democrats focus on kitchen table issues like health care. But the choice has always been false; the House can and should do both. In addition to the active impeachment inquiry into Trump’s efforts to influence the 2020 election, there should be a second, no less serious impeachment inquiry into Trump’s efforts to undermine Obamacare.

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This piece is part of TPM Cafe, TPM’s home for opinion and news analysis.

Heading into the 2020 elections, Democrats need to place an emphasis on pro-democracy reforms that cement the right to vote. And if they are able to win back the White House and the Senate, the party must be prepared to take advantage of their progressive majority and pass these policies immediately.

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Paul Krugman’s latest New York Times column is on today’s cloture vote and a must read.

This piece is part of TPM Cafe, TPM’s home for opinion and news analysis. It is an excerpt from “Narrative Economics: How Stories Go Viral and Drive Major Economic Events,” out this month. 


The wage-price spiral narrative took hold in the United States and many other countries around the middle of the twentieth century. It described a labor movement, led by strong labor unions, demanding higher wages for themselves, which management accommodates without losing profits by pushing up the prices of final goods sold to consumers. Labor then uses the higher prices to justify even higher wage demands, and the process repeats itself again and again, leading to out-of-control inflation. The blame for inflation thus falls on both labor and management, and some may blame the monetary authority, which tolerates the inflation. This narrative is associated with the term cost-push inflation, where cost refers to the cost of labor and inputs to production. It contrasts with a different popular narrative, demand-pull inflation, a theory that blames inflation on consumers who demand more goods than can be produced.

As the chart below shows, the two epidemics, wage-price spiral and cost-push inflation, are roughly parallel. Both epidemics were especially strong sometime between 1950 and 1990. These epidemics reflected changes in moral values, indicating deep concerns about being cheated and a sense of fundamental corruption in society. According to the narratives, labor unions were deceitfully claiming to represent labor as a whole, when in fact they were representing only certain insiders. Meanwhile, politicians and central banks were selfishly perpetuating the upward spiral of inflation, which impoverished real working people not represented by powerful unions. There has been a long downtrend in public support in the United States for labor unions, from 72% in 1936 to 48% in 2009, as documented by the Gallup Poll.

Frequency of Appearance of wage-price spiral and cost-push inflation in Books, 1900–2008. These two related epidemics helped bring about major changes in labor relations and government regulation of business. Source: Google Ngrams, no smoothing.

These narratives were enhanced by detailed stories that invited angry responses. For example, around 1950 an outrageous story went viral about labor unions’ reframing their wage in terms of miles traveled rather than hours worked. The New York Times described it thus in 1950:

One of the rule changes asked by these two unions is that the pay base for trainmen and conductors on passenger trains be lowered to 100 miles or five hours, from 150 miles or seven and a half hours. The railroads have countered by asking that the basic day’s work be increased to 200 miles. . . . Because of recent technological improvements, including the greater use of diesel locomotives, the speed of passenger trains has been increased, where many passenger train service employes now receive a day’s pay for two and a half to three hours of work. By reducing the number of miles in the basic day to 100, the mileage rate of pay of the passenger train employes would be increased by 50 per cent.

So, the story went, the conductors would have the opportunity to sit down as passengers after working only two and a half hours, long before the trip was over. Such an outrageous demand made the narrative highly contagious, and it is memorable enough to be remembered today.

Labor unions became associated in the public eye with organized crime. For example, Jimmy Hoffa took over the International Brotherhood of Teamsters union in 1957, despite corruption charges against him then, and led that union as an absolute dictator. There was for years an ongoing story of his investigation for gangster-like activities, in a probe led by Robert F. Kennedy. Hoffa was convicted of bribery and fraud and went to prison from 1967–71. In 1975 he disappeared after being last seen in the parking lot upon leaving the Red Fox Restaurant in Bloomfield Township. Rumors were that he was murdered by rival gangsters. Rumors were that his body “was entombed in concrete at Giants Stadium in New Jersey, ground up and thrown in a Florida swamp, or perished in a mob-owned fat-rendering plant.” These colorful theories, which suggest vivid visual mental images of Hoffa’s ignominious end, led to the contagion rate of the Hoffa epidemic that further discredited labor unions. The search for his body in a garbage dump, an empty field, and elsewhere created news stories until 2013. This was a viral story, part of a constellation of narratives that described labor unions in negative terms, and which impelled many people to see real evil in them.

The wage-price spiral narrative was reflected in actual inflation rates around the world, which tended to be unusually high when the narrative was strong. The World Bank’s Global Inflation Rate peaked in 1980, approximately at the peak of cost-push inflation in the chart above, and it has been mostly on the decline ever since. These epidemics also saw high long-term interest rates, reflecting the inflation expectations engendered by the narrative. Today, inflation is down across much of the world, and long-term interest rates have fallen since the epidemic peaked. The dynamics of this worldwide narrative epidemic likely provide the best explanation for these epochal changes in trend of the two major economic variables, inflation and interest rates.

The end of the wage-price spiral narrative was marked by changes in monetary policy and the advent of newly popular ideas: the independent central bank and inflation targeting by central banks. The independent central bank was designed to be free from political pressures, which organized labor tries to exploit. Inflation targeting was designed to place controlling inflation on a higher moral ground than appeasing political forces.

The moral imperative here was strong. On its face, the wage-price spiral may seem purely mechanical. However, many believed it was caused by the greedy (immoral) behavior of both management and labor. President Dwight Eisenhower referred to the spiral in his 1957 State of the Union address:

The national interest must take precedence over temporary advantages which may be secured by particular groups at the expense of all the people. . . . Business in its pricing policies should avoid unnecessary price increases especially at a time like the present when demand in so many areas presses hard on short supplies. A reasonable profit is essential to the new investments that provide more jobs in an expanding economy. But business leaders must, in the national interest, studiously avoid those price rises that are possible only because of vital or unusual needs of the whole nation. . . . Wage negotiations should also take cognizance of the right of the public generally to share in the benefits of improvements in technology.

Even though 1957 saw only a moderate burst of inflation, from less than zero in 1956 to a peak of 3.7% in 1957 and far smaller than the 23.6% in 1920, it stirred emotions because of the moralizing narrative that attended it. A 1957 editorial in the Los Angeles Times exemplifies the reaction:

What is wrong with our country? A creeping inflation is like a small crack in a dam or dike as it grows menacingly larger by the force of the seeping water. The crack in our national economy is being widened by greed—greed of some leaders of big business and labor as they continue to boost prices and wages, each blaming the other, and neither pausing to realize that the economy of our country is at the breaking point with a crash being inevitable if we do not level off now and hold prices and wages. It may even be too late.

The moralizing in these narratives, spoken by presidents and prime ministers and published and commented on by journalists, gave the U.S. Federal Reserve and other nations’ central banks the moral authority to step hard on the brakes, risking a recession. They did just that, tightening money gradually until the discount rate rose to a peak in October 1957. Allan Sproul, the recently retired president of the Federal Reserve Bank of New York, in 1957 lamented the difficult role of the Fed as the “economic policeman for the entire community.” He noted the blame the Fed gets for the expansion before a crackdown:

As it is, there are times when your Federal Reserve System finds itself in the position of having to validate, however reluctantly, public folly and private greed by supporting increased costs and prices.

Dock workers hold up their union cards during a walkout, which helped cripple Great Britain in the greatest strike in the history of the world. (Getty Images)

Inflation in a Constellation of Injustice and Immorality Narratives

When inflation has been high, many commentators have regarded it as the most important problem facing the nation. Starting in 1935, the Gallup Poll has repeatedly asked its U.S. respondents, “What do you think is the most important problem facing this country [or this section of the country] today?” During the era of highest U.S. inflation, from 1973 to 1981, generally more than 50% of respondents responded by saying either “inflation” or “the high cost of living.” This perception appears to have been common across much of the world. Reflecting this view, economist Irving S. Friedman wrote in his 1973 book Inflation: A World-Wide Disaster that the increasing inflation was sending “panic signals throughout the world,” opining that the inflation crisis was as serious a problem as the Great Depression of the 1930s. Inflation was “eroding the fabric of modern societies” and “threatens all efforts to keep the international monetary system from fragmenting into hostile forces.”

The discourse seemed to want to fix blame on some segment of society, either labor or business, for the inflation. Popular syndicated columnist Sydney J. Harris wrote in 1975:

What is so frustrating about this kind of thing is the difficulty in pinning down the culprits, if any . . .

Either somebody is lying, or the whole economic process doesn’t make sense.

If labor is getting “too much,” why are most working families struggling to make ends meet?

If grocers are “profiteering,” why do they get glummer as prices go higher?

Where does the buck stop? Nobody knows. And so each segment blames another for the vicious spiral, and each justifies its own increases by pointing to its own rising cost of doing business.

the market no longer seems to control prices when they keep escalating despite reduced consumption.

Some strange new twisted law appears to be operating in place of the classical formula of the “free market.”

I am not versed enough in economics to understand what is going on; neither are most people.

In contrast to the 1920s, there were now multiple possible sources of evil behind inflation, not so focused on evil businesses of various kinds, but now also on evil labor.

In my 1997 study of public views of the inflation crisis in the United States, Germany, and Brazil, conducted after the worst of the inflation had subsided but during a period in which people remained concerned about inflation, I surveyed both the general public and, for comparison, university economists. My research uncovered differences in narratives across countries, across age groups, and, particularly, between economists and the general public.

For the most part, the economists did not think that inflation was such a big deal, unlike Irving Friedman, who was writing for the general public. Meanwhile, although U.S. consumers did not agree on the causes of the inflation, they were nonetheless angry about it. When asked to identify the cause of the inflation, their most common response was “greed,” followed by “people borrow or lend too much.” In specifying the targets of their anger, the U.S. respondents listed, in order of frequency, “the government,” “manufacturers,” “store owners,” “business in general,” “wholesalers,” “executives,” “U.S. Congress,” “greedy people,” “institutions,” “economists” “retailers” “distributors,” “middlemen, “conglomerates, “the President of the United States,” “the Democratic party,” “big money people,” “store employees” (for wage demands that forced price increases), their “employer” (for not raising their salary), and “themselves” (for being ignorant of matters).

In addition, unlike economists, the general public believed in a wage lag hypothesis: the idea that wage increases would forever lag behind price increases, and therefore that inflation had a direct and long-term negative impact on living standards. In short, the wage-price spiral offered a geometrical mental image of one’s economic status spiraling down for as long as strong aggressive demands of labor kept it happening.

In some ways the 1957–58 recession differed substantially from earlier recessions. It did not have the character of a buyers’ strike, as the Great Depression did. In fact, sales of luxury items remained very strong. Anger was not so much directed against “profiteers,” and there was little shame in living extravagantly. The alarmist talk about the wage-price spiral did not focus anger onto the rich. Rather, sales of postponable everyday purchases suffered more.

At the same time, the public sensed that no feasible government policy could stop the wage price-spiral. The earlier recessions of 1949, 1953, and 1957 had left inflation a little lower, but only temporarily. The lingering narrative of the Great Depression suggested to the general public that it was perhaps too great a risk to try to control inflation by starting a bigger recession. That idea was part of the popular conception of the wage-price spiral model, that the nation should base all of its economic decisions on the assumption that inflation will get worse and worse.

Picket line outside Mount Sinai hospital in New York in 1959. (Getty Images)

Angry at Inflation

Out-of-control consumer price inflation has occurred many times throughout history, and the phenomenon has always induced anger. The loss of purchasing power is extremely annoying. But the question is this: At whom should the public direct its anger? Anger narratives about inflation reflect the different circumstances of each inflationary period. By studying these narratives, we can see the effects of inflation and how they change through time.

The most extreme cases of inflation tend to happen during wars. When governments are in trouble, they may not be able to collect taxes fast enough to pay for the war, and in desperation they resort to the printing press for more money. But the stories may not resonate, and the public may not see or understand what is happening. That is, narratives that blame the government for the inflation may not be contagious during a war. Instead, it is more likely that people want to blame someone else. Businesspeople, who are staying home safely while others are fighting, are a natural target of narratives.

We saw the remarkable epidemic of the word profiteer during and just after World War I. People were very angry that some businesspeople were made rich by the war, and the result was the imposition of an excess profits tax (not only during World War I but also during World War II). Such anger against the people who get rich during wartime is a perennial narrative, not limited to the twentieth century. For example, there was anger during the U.S. Civil War (1861–65) at those who profited from the war, but it wasn’t directed at business tycoons creating inflation to make large profits. The narratives were different. Consider, for example, this sermon by Reverend George Richards of the First Congregational Church of Litchfield, Connecticut, on February 22, 1863:

How, in contrast with the greedy speculators, in office and out of it, who have prowled, like famished wolves, round our fields of carnage—stealing everything they could lay their hands on—robbing the national treasury—purloining from the camp-chest—pilfering from the wounded in the hospitals—appropriating to themselves the little comforts meant for the dying, if not stripping the very dead!

During the 1917–23 German hyperinflation, the inflation rate was astronomical, and not due to any war. Prices in marks rose on the order of a trillionfold. And yet many people were unable to identify the malefactor who was causing inflation. Irving Fisher, an American economist who visited Germany at the time, found that Germans did not blame their own government, which had been printing money excessively. Fisher wrote:

The Germans thought of commodities as rising and thought of the American gold dollar as rising. They thought we [the United States] had somehow cornered the gold of the world and were charging an outrageous price for it.

As of this writing, there is some suggestion of resurgence in the strength of labor unions, and of public support for them, in the United States. The wage-price spiral narrative does not seem poised to reappear. Inflation in the United States and other countries seems unusually tame. However, a mutation of the narrative could appear if inflation begins to creep up. The public tends to watch consumer prices closely, because of its constant repetition of purchases. The wage-price spiral narrative, or some variation on that theme, could again create a strong impulse for economic actors to try to get ahead of the inflation game. It could give them newfound zest in this effort by bringing a moral dimension into the mix, a perception of true evil in inflation, personified by certain celebrities or classes of people.


Robert J. Shiller is a Nobel Prize–winning economist, the author of the New York Times bestseller Irrational Exuberance, and the coauthor, with George A. Akerlof, of Phishing for Phools and Animal Spirits, among other books (all Princeton). He is Sterling Professor of Economics at Yale University and a regular contributor to the New York Times. He lives in New Haven, Connecticut. Twitter @RobertJShiller

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This article is part of TPM Cafe, TPM’s home for opinion and news analysis. It was published here and on the website for the Brennan Center for Justice.

It was a pretty good troll. On Friday, Elizabeth Warren’s campaign ran an ad on Facebook saying that the social media giant had endorsed President Trump. 

It hasn’t, of course — as the ad acknowledged a few sentences later. The goal, which it achieved and then some, was to draw attention to Facebook’s recent refusal to take down a Trump campaign ad that makes an objectively false claim about former Vice President Joe Biden and Ukraine, and the threat that stance poses to fair elections. Let’s see how you like having lies told publicly about you, Warren was saying to Mark Zuckerberg and company. 

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This article is part of TPM Cafe, TPM’s home for opinion and news analysis. 

The cacophony of radical right-wing violence that reverberated within the communities of Charlottesville, El Paso and Pittsburgh recently resulted in a long overdue decision by the Department of Homeland Security to treat white supremacy as a domestic terrorism threat. While DHS’ rhetorical shift is useful, it is now time for the government and private sector to counter the finances that help fuel white supremacists’ violence.

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This article is part of TPM Cafe, TPM’s home for opinion and news analysis.

The 2016 election and President Trump’s first term in office has transformed politics in this country. His election represented not only a radical change in policy but an assault on what we consider fundamental American values.

Going into the 2020 election, many on the left are thinking about the work that the next president and Congress will have to do to repair the damage done since 2016 and address the crises Trump has created and exacerbated. Protect Democracy, for example, has proposed a package of legislative reforms to prevent presidential abuse of power. However, some have argued that Democrats should adopt some of the tactics Trump has used and bend some rules to set the country back on the correct course.

This represents a big shift in the way we think about politics, and we need new terminology to accurately discuss what we believe in.

For most of my life, our political spectrum has run from the political left to the political right. People are socially liberal or socially conservative, economically liberal or economically conservative. Increasingly, this dichotomy fails to capture a new spectrum emerging in American politics — those committed to “liberal democracy” and those more willing to sacrifice it and live under a more authoritarian style of government in order to secure policy gains.

The emergence of this new political spectrum has come about through what has been called “the big sort,” where people’s identities are increasingly aligned with their political parties. Gone are the days when someone who shares your life experience across geography, age, race, and education may belong to either political party. Increasingly, if you know someone’s race, age and education level, you can guess their political affiliation. For example, as a 28-year-old non-white law school graduate, you can guess that I am a Democrat because 73% of non-white millennials lean Democrat as do 59% of voters with post-graduate experience.

Leaders from Modi in India to Trump in the United States to far-right populist movements in Europe are using the fact that our political opponents are often different from us across religion, race, age, and education level to make us fear and even hate them. Around the world, we have seen this suspicion of the “other” play out in political movements through a rise of would-be dictators using racism and a narrow view of national identity for their own political gain. In the United States, Americans increasingly view their political opponents as the enemy, saying that they’d oppose their child marrying someone of a different political belief. In 2018, in a perfect encapsulation of suspicion of the other party, we saw Republican voters wearing shirts saying, “I’d rather be a Russian than a Democrat”.

Furthermore, because of the “big sort,” we have increasingly little interaction with people of different political parties and, therefore, less opportunity to challenge these suspicions or narratives from opportunistic political leaders. For example, I had not knowingly interacted with a Republican until a year and a half ago, when I started at Protect Democracy, a non-partisan non-profit working to prevent the United States from declining into a more authoritarian form of government. Working with Republicans has caused me to challenge my idea that the GOP is the enemy and forced me to think about the extent of my tolerance and inclusion.

I have found myself surprised by my Republican colleagues’ indignation around racism and sexism. And then embarrassed by my surprise. I have found myself moved by their willingness to fight their own party, which for some of them has also meant a loss of close friends or family, because they believe in higher principles and a version of America that more closely aligns with mine than with the Trump-led GOP on race and gender. I’ve become less judgmental and more curious. I also have more trust in the intentions, if not the impact, of my fellow Americans’ political decision-making.

This is important, not only for me as an individual but for American democracy as a whole. We know from the research that “levels of personal trust tend to be linked with people’s broader views on institutions and civic life.” Put simply, if we don’t trust each other then we don’t trust our democratic process to deliver for us. To be sure, our processes are not neutral and often rooted in historic inequality and power disparities. However, if we are unwilling to engage in the project of improving the processes of liberal democracy and are instead focused solely on implementing policy we agree with at all costs, we may create more problems for ourselves in the future.

Democracy in the United States is not guaranteed, it’s an idea that each generation has to renew and redefine. "

For example, some Members of Congress have called for the next President to declare a national emergency to address the actual emergency of climate change. They would have the next President replicate the abuses of President Trump by bypassing Congress for the sake of policy expediency. While I deeply appreciate the urgency of the climate crisis, I also see the danger in a Democratic president legitimizing Trump’s abuse of the National Emergency Act — it could be abused yet again when someone I disagree with gets elected again.

Even as I look back on President Obama’s presidency, I can see the ways that President Obama — struggling with a Republican Senate that wouldn’t work with him — laid the groundwork for some of the abuses that we’re seeing under President Trump on appointments and executive orders. President Trump has taken that lesson and gone well beyond it. I fear what a president with similar inclinations to Trump, but more strategic wherewithal would do.

American politics is no longer split merely between left vs. right. We are in an era of American politics when some people recognize and value the frustrating moderating effects of the checks and balances of American democracy, whereas others view it as a hindrance to achieving their policy goals. Right now many think that it’s those in the opposing party who don’t care about democracy, but I am not convinced. We need a better way to discuss the precedents in decision-making the parties are cementing and the dangers they may be setting us up for.

We need an additional ideological spectrum to talk about politics in America today, one that places those who care about our democracy on one end, and those willing to live under a more authoritarian style of government for policy gains on the other.

As I watch the 2020 primary season play out, I find myself looking beyond a candidate’s policy preferences and paying attention to whether their plans for implementing their agenda will help or hurt our democracy. I believe it’s not enough to win. We have to think about the process and structures we’re leaving in place for the next person, whose policy views we may not agree with. I want to know what candidates will do to prevent the emergence of another president like Trump. How will they make sure our checks and balances work so that someone can’t blatantly disregard norms? How will they ensure elections are free, fair and accessible? What will they change to make sure the marginalized are protected and our right to dissent is maintained?

In order to solve the new problems we’ve been confronted with, we need new solutions. Democracy in the United States is not guaranteed, it’s an idea that each generation has to renew and redefine. By including this new political spectrum in our thinking, we can ensure that we work to preserve and perfect our democracy for future generations.


Aditi Juneja is an attorney and communicator for Protect Democracy. She co-founded and led the Resistance Manual and She was named to Forbes 30 Under 30 for Law and Policy in 2018. She holds a B.A. in Economics from Connecticut College and a J.D. from New York University School of Law.

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This article is part of TPM Cafe, TPM’s home for opinion and news analysis. 

In just the past two decades, two presidents have been elected without winning the popular vote, leaving many Americans questioning the virtue of the Electoral College.

And if you’re unhappy with the current system for electing presidents, you should be wary of a recent decision from the U.S. Court of Appeals for the Tenth Circuit and the possibility that it could be upheld by the Supreme Court.

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This article is part of TPM Cafe, TPM’s home for opinion and news analysis. 

Much has been made of the out-of-work, Midwestern factory worker as a symbol of American decline. But just as symbolic is a gleaming 1.6 mile stretch of road at the northern tip of one of the country’s most elite locales, San Francisco, California.

The newly constructed Presidio Parkway, which replaces one of Franklin Delano Roosevelt’s New Deal projects, is a hulking chunk of concrete snaking through the eucalyptus trees and tidal marsh of the Presidio, first inhabited by the Ohlone people and now a public park and national historic landmark. Though lauded for its innovative design, the project has a Trumpian twist — it was paid for through smoke and mirrors.

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