Is the cure for inflation worse than the disease?
or, what are the risks of hiking interest rates?
Those of you who follow me know I’m not typically reporting on “the economy” per se, or macroeconomics per se. But I certainly feel like everything I am focused on is connected, and that we lose something when we become too glued to our narrowly construed beats.
About a month ago I was in a meeting with my team at Vox and just thinking out loud that I don’t quite understand what the consequences of continuing to interest rates might be on working families. There was a lot of coverage I had seen about the negative impact on homeowners and potential home-buyers, and we certainly have gotten a lot of attention on the toll of inflation on people’s household budgets, especially for gas and groceries and the like. And I saw a lot of stories mulling over the question of whether we’re in a recession, and what economic indicators would confirm that or not.
But I was not seeing any stories really addressing the question of what it would mean for people if we were in a recession! And crucially, it was not lost on me that the generous Covid-19 stimulus policies Congress passed have become a punching bag in the midterms, where even Democrats are hardly campaigning on them. I wrote a lot about those policies at the time, and it certainly seemed like the political environment for federal spending looks very different than it did two years ago. What would that mean for people who need aid?
A lot of good stories come out of questions readers or we have, and I was glad to be able to spend some time reporting these questions out. Sometimes it can be really helpful to write about a topic you know less about, because all your “dumb” questions are probably ones many readers share too. I was able to ask questions like “who is likely to experience job layoffs first? What about after that?”
Anyway this is a story about the risks of a recession, especially for those suffering most now from inflation. You can read it here.