OpEd: Why the Wall Street Journal Got It Wrong and 74% of Their Poll Respondents Got It Right

A recent article in The Wall Street Journal claims that the assessment by 74% of poll respondents in election swing states who believe inflation moved in the wrong direction last year is incorrect. The piece went on to state that the respondents’ perceptions were “contradicted by hard economic data”.

Like many of us, I just love “hard data”, especially when it’s “economic”.

One great aspect of “hard data” is that we must assume it’s correct; otherwise, how could it be “hard”? In fact, this accolade is often applied when the source is the government or a university, where there’s little room for criticism. Often it's perceived that mistakes are just not possible, so the data must be accepted.

Unfortunately, as often happens, the interpretation and application of such data is static, and as we all know, reality tends to be fluid.

You can’t assess the effects of inflation if you don’t consider the time window.

Consumers understand this since they experience inflation firsthand.

Some very recent history:

In 2022, according to the U.S. Department of Agriculture (USDA), year-over-year prices for food at home increased 13.5%, the largest 12-month percentage increase since the period ending March 1979.

Fast forward to last year, again the USDA reported, with food at home increasing by 5% (and food away from home increasing by 7.1%).

So, let’s analyze the data above:

According to our government, home food prices rose 13.5% in 2022 and another 5% in 2023. Keep in mind that 2023's 5% increase on top of a 13.5% increase in 2022 is being compounded, just like interest.

So, in a relatively short period, prices for food at home increased more than 18.5%.

Yes, I know inflation is cumulative and “resets” every year, but we are not comparing today's food prices to those of 1901. We all realize that prices increase over time, but the speed at which they rise is extremely important to consider.

The effect of an 18.5%+ increase in food prices in only 24 months has a much greater inflationary impact than would a 1% yearly increase on those same food prices drawn out over 18.5 years.

You just can’t ignore the time window in relation to the inflation percentage. Both are essential to analyzing the effect on consumers and the economy.

The same applies to the recent inflation affecting heating fuel, utilities, prices at the gas pump and many other life essentials (like affordable homes and mortgage rates).  

The effects of these are obviously cumulative and directly affect our daily lives, unlike “hard economic facts” which don’t need to worry about paying the food and utility bills at the same time.

In March of 2023, the number of households behind on their utility payments increased to nearly 20 million, up from 17.6 million a year earlier, an increase of 13%.

This year, according to Bloomberg, residential utility debt has broken U.S. records with more than one in six households behind on their energy bills.

I recognize that as you read this you may be wondering why we selected this subject to comment on when for decades our news has focused on maritime matters. Well, for one thing, inflation affects all of us, both in and out of the maritime industry. For another, when it comes to “hard economic facts” and reality, we always choose reality. We owe it to our readers.