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Why the Inflation of 2021-22 Did Not Spiral Into Stagflation and Implications for Policy Going Forward

The ominous uptick in consumer prices that began in the spring of 2021 triggered alarm bells. By fall, the future looked dark to many observers.  A market…



The ominous uptick in consumer prices that began in the spring of 2021 triggered alarm bells. By fall, the future looked dark to many observers.  A market strategist cited by Reuters warned that the surge in inflation would not be transitory, as the Fed and Biden administration were then promising. “Sticky and sustained” inflation when the country was “past peak growth” would constitute “stagflation," he said, reviving a term coined in the 1960s.

Yet there was no stagflation. The 2021-2022 episode turned out to be very different from the economic turmoil that bedeviled the U.S. economy from the 1960s into the early 1980s. Its brevity was one key difference. A second difference was a far greater volatility of relative prices. A third concerned the role of expectations. As this commentary will explain, these three differences, taken together, carry important lessons for policymakers. 

“Transitory” or not, the inflation of 2021-2022 was short-lived

To be sure, not everyone caught stagflation fever. Janet Yellen, the only person to have served as the president's chief economist, Fed chair and Treasury secretary, was one skeptic. “My judgment right now is that the recent inflation that we have seen will be temporary,” she told a congressional committee in May of 2021. By the end of the year, even she had second thoughts. In retrospect, though, her original assessment looks more right than wrong. By the end of 2022, inflation had come down even more quickly than it had risen, and did so while the unemployment rate was, surprisingly, falling. 

Figure 1 provides a panoramic view of inflation over the past 60 years. The dots show monthly observations, stated as annual percentage rates, for the change in the consumer price index over the preceding three months. (For short, I will refer to these as “3-month rates.”) The solid line is a 12-month moving average of the 3-month rates. 

As the chart shows, the wave that peaked early in 1980 was the culmination of three that spanned nearly two decades. Each of the waves made the next one more difficult to handle because of its effects on expectations – a theme to which we return below. The inflation of 2021-22, in contrast, was a single spike that came after a 40-year period of relative price stability that has come to be known as the “Great Moderation.” 

Table 1 breaks down the four inflationary episodes into periods of accelerating inflation (shown in the chart by red arrows) and disinflation (green arrows). I count 2 percent per year, the Fed’s target inflation rate, as effective price stability. Accordingly, I measure accelerations from the last month in which 3-month inflation is near 2 percent to the peak 3-month rate, and disinflations from the peak 3-month rate to the month in which inflation drops below 2 percent, or a new acceleration begins. The table also shows the rate of acceleration or disinflation, measured as the number of basis points by which the rate of inflation changed each month. (A basis point is 1/100th of a percentage point.)

As the table shows, the acceleration phase of the 2021-22 inflation was shorter than any of the earlier episodes, and the rate of acceleration, measured in basis points of change per month, was more rapid. The same is true of the disinflation that took place in the second half of 2022 compared to the earlier disinflations – it was shorter in duration and inflation slowed more rapidly. 

There has been much debate over whether this episode of inflation was transitory. By comparison with the 1960s and 1970s, I think the term fits, but there is no official definition. 

The chart ends in December 2022. Is it possible that inflation will come roaring back in 2023? That 2021-22 was just the first in a series of stagflationary waves like those of the past? The final section will return to that issue, but first we need to look at two other ways in which the recent inflation was different.

Relative prices and why they matter

This section turns to a sometimes-neglected distinction between changes in the average level of prices and changes in relative prices. Figure 1 and Table 1 show only changes in the average price level. Obviously, though, the prices of individual goods and services do not all rise or fall at the same rate. Even while the average is rising, some prices rise more rapidly than others. During disinflations, some prices slow down or even fall while others continue to increase.

Changes in relative prices can be either the result of changes in the average price level, or the cause of such changes. 

Consider, first, relative price changes that are caused by inflation – endogenous relative price changes, I will call them. In standard models, inflation is typically driven by changes in aggregate demand, such as those induced by expansionary fiscal or monetary policy. These expansionary policies put upward pressure on prices throughout the economy. However, even if the pressure is uniform, the response to it is not. Some prices change quickly, even by the hour. Others are “sticky.” They change infrequently and only when pressures for change accumulate.

The Atlanta Fed publishes a separate index of sticky prices. According to its research, prices of personal services, public transportation, and rents are among the stickiest, while prices of gasoline, fresh produce, and used cars are among the quickest to move. As a result of differential stickiness, a broad change in aggregate demand induces endogenous changes in relative prices as some markets react faster than others. If overall demand were to stabilize long enough, the sticky prices would eventually catch up. The original configuration of relative prices would then be restored, but at a higher average level.

In other cases, exogenous changes in relative prices are the original impetus for inflation. Suppose, for example, that the world price of oil increases while policies affecting aggregate demand remain unchanged. One might think that as the higher oil price shows up at the gas pump, increased spending on gasoline would divert demand away from other goods, whose prices would fall, leaving average prices unchanged. But in practice, markets don’t work that way. 

For one thing, even if demand for goods other than oil falls, prices won’t adjust immediately in markets where they are sticky. Also, oil is not just a consumer good, but also an input into the production of other goods and services. As a result, prices of things like air fares and plastics made from petroleum will rise when the price of oil rises even if higher oil prices divert demand away from those markets. Consequently, the initial exogenous change in the price of oil triggers endogenous relative price changes throughout the world economy. 

Episodes of inflation like this that begin with an exogenous change in the price of a single good are known as supply shocks. Supply shocks pose a dilemma for policymakers. When inflation is caused by rising aggregate demand, the Fed’s go-to remedy is to increase interest rates. As the effects spread throughout the economy, they reduce demand for all goods and services, and inflation slows. If rates are raised in a timely fashion and not by too much or too little, the overheated economy will cool off without major disruptions.

Inflation caused by a supply shock is trickier. Since a supply shock begins with an increase in the relative price of one good (oil in our example) and then spreads to other markets where that good is used as an input, there would be no way to prevent an increase in the average price level unless the prices and wages in some other sector fall. But stickiness gets in the way. 

Not only are the prices of some goods inherently stickier than others, but many prices are stickier downward than upward. Consider apartment rents, for example. They are sticky even upwards, as we have seen, but even so, landlords will be quicker to raise rents in response to low vacancy rates than to cut rents in response to high vacancies. Wages are especially asymmetrical in their stickiness. Workers are rarely reluctant to accept offered wage increases, but if wages are cut, they protest, fall into an unproductive sulk, or simply quit.

The asymmetrical stickiness of prices and wages is a major problem when the Fed sets out to fight supply-side inflation by repressing aggregate demand. Attempts to offset increases in some prices by pushing prices and wages down elsewhere disrupt markets, raise unemployment, and lower real output. To avoid that, the Fed may prefer to “accommodate” supply shocks by going easy with interest rate increases. Accommodation allows the average price level to rise by enough that even the prices and wages that need to fall in relative terms can do so without actual nominal reductions. 

The optimal amount of accommodation depends on just how volatile relative prices are. During the Great Moderation, the Fed settled on a target inflation rate of about 2 percent rather than aiming for zero inflation. That was seen as enough to accommodate the degree of volatility that was then considered normal. However, 2 percent is not necessarily enough to handle really large supply or demand shocks, or both at once. 

Coming back from theory to the real world, Figure 2 adds data on the volatility of relative prices (red line, right axis) to the inflation data that was shown in Figure 1 (blue line, left axis).[1] Both variables are charted as 12-month moving averages.

It is clear at a glance that inflation and relative price volatility are related. All four of the major inflation waves discussed in the previous section were associated with increases in relative price volatility. What is more, the deflationary episodes of 2008-2009 and 2014-2015 were also associated with spikes in volatility.[2]

Note, though, that the volatility of relative prices during the 2021-2022 inflation was higher, both absolutely and in relation to the peak inflation rate, than during any of the inflationary episodes of the 1960s or 1970s. The volatility was due in large part to an unusual cluster of shocks, including pandemic-driven shifts in consumer spending from services to goods and back again; supply chain problems that sent prices of new and used cars soaring; and disruptions to world oil and grain markets stemming from the war in Ukraine. 

The last section of this commentary will discuss whether or not the fiscal and monetary response to these shocks was appropriate. Before that, however, I would like to point out one more way in which the inflation of 2021-22 differed from those of earlier decades.

Inflation expectations, anchored and adaptive

Episodes of inflation and stagflation are often represented using Phillips curve charts. Typically, these show the unemployment rate on the horizontal axis and the year-on-year rate of CPI inflation on the vertical axis. In the traditional version, the Phillips curve is a simple negatively sloped line. Over the course of a cyclical expansion, the unemployment rate falls and inflation rises. The economy slides up and to the left along the Phillips curve. After the cyclical peak is reached, it slides back down along the same path.

In practice, though, the behavior of the economy over the business cycle is not that simple. Figure 3 shows the path of the U.S. economy before and after the inflation peaks of the 1970s and early 1980s. In each case, the unemployment rate began to rise before the peak rate of inflation was attained. After the inflation peak, the unemployment rate continued to rise for several months as inflation slowed. In the chart, that pattern, which gave rise to the term stagflation, forms series of arcs that rise and fall from left to right.

Economists explain the left-to-right arcs in terms of the way monetary policy interacts with inflation expectations.[3] The patterns in Figure 3 were a consequence of the way workers and producers adapted their expectations in the wake of repeated waves of inflation in the 1960s and 1970s. 

Here is one way to tell the story: Suppose you are unemployed and looking for work. If a prospective job offers to pay enough to cover not just the rent and grocery bills you are now paying, but the higher bills you expect in the future, you will take it. If not, you will continue looking. Or suppose you are a firm making your production and marketing plans for the coming year. You have plenty of customers, but you expect wages and the prices of inputs to rise, so you ramp up production and raise your own prices preemptively in an effort to preserve your profit margin.

These adaptive behaviors work fine as long as the economy remains strong, but suppose now that the Fed raises interest rates to slow the growth of demand. Workers looking for jobs take longer to find them. That by itself would be enough to raise the unemployment rate. At the same time, firms see sales slow and inventories start to rise. They cut output and lay people off, which further raises unemployment. Yet both workers and firms still expect more inflation to come. Ambitious wage demands and preemptive price increases continue. The economy moves up and to the right along an arc like those in the chart. 

Eventually, though, if the Fed sticks to its guns, higher unemployment and slowing demand start to bite. Workers take jobs at wages they would previously have turned down. Firms cut prices to get rid of growing stocks of unsold goods. Inflation slows and the economy moves along the downward slope of the arc. But it takes a long time and a lot of unemployment to finally break the momentum of inflation expectations.

Now turn to Figure 4, which shows the path of the economy in the months around the inflation peak of 2022. Here, the pattern is completely reversed. The arc, instead of running from left to right, runs from right to left. Unemployment falls as the inflation peak approaches, much as posited by the classic Phillips curve. After the peak is reached, inflation rapidly slows with little change in unemployment.

A reasonable explanation of the right-to-left arc in Figure 4 is that this time, inflation expectations were no longer adaptive. Instead, they had become anchored by the decades of price stability during the Great Moderation. That being so, the rising inflation of 2021 and early 2022 did not cause each month’s inflation to be taken as a signal of more inflation to come. Rather, even while the fiscal stimulus from pandemic-era spending, combined with a series of supply shocks, pushed prices upward, workers and firms expected inflation soon to begin falling back toward the Fed’s 2 percent target. 

The anchoring of expectations indicated by the 2021-2022 Phillips curve is confirmed by more conventional sources, as Fed Governor Lisa D. Cook noted in a recent speech. After reviewing several measures of inflation expectations derived from surveys and bond market prices, Cook concluded that “expectations are still within their pre-pandemic ranges.” 

In short, the available evidence suggests a fundamental regime change from adaptive to anchored inflation expectations over the past 40 years. The change is of more than theoretical interest. Its practical effect has been an enormous reduction in the cost of disinflation. The descents from the inflation peaks of earlier years involved month after month of high and rising unemployment.  The descent in 2022 took just half a year, throughout which unemployment remained near historic lows. 

Implications for policy

Earlier sections have described three fundamental differences between the inflation of 2021-2022 and the repeated waves of stagflation that roiled the U.S. economy in the 1960s and 1970s. 

  1. Whether we call it “transitory” or not, the recent inflation has been the shortest of the four episodes examined, with the most rapid rate of acceleration and most rapid rate of disinflation.
  2. The 2021-2022 inflation, which was, in large part, driven by an unusual combination of supply shocks, had the greatest relative price volatility of any period in the last 60 years.
  3. The decades of the Great Moderation saw a fundamental regime shift away from adaptive and toward anchored expectations, as shown by a reversal of the Phillips curve pattern and confirmed by conventional survey-based and market-based measures.

Here are some conclusions for policy that I draw from these differences.

Policy in 2021-2022 does not look so bad, after all.

Macroeconomic policy over the past two years has had no shortage of critics. Start on the fiscal policy side. In February 2021, when prices were just beginning to rise, Lawrence Summers, a former Treasury secretary and a key adviser to President Barack Obama, weighed in against the size of the economic stimulus package that the Biden administration was proposing. “There is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation,” he said. He pointed specifically to a “risk of inflation expectations rising sharply.”

Monetary policy came in for its share of criticism, too. In a May 2022 interview with CNBC, when inflation had still not peaked, former Fed Chair Ben Bernanke complained of inaction by monetary policymakers. “Why did they delay their response? I think in retrospect, yes, it was a mistake. And I think they agree it was a mistake,” he added.

Yet, from the perspective of early 2023, the past two years of monetary and fiscal policy look much better. Yes, inflation in mid-2022 spiked to its highest levels in four decades. Yes, many people felt the pain. But would a tighter budget and higher interest rates imposed earlier really have eased that pain, or only changed the form it took? 

Shutting down the growth of aggregate demand in early 2021 would not have erased supply shocks from the pandemic, war, and tangled supply chains. But slower growth of demand would have made it more difficult to achieve the necessary relative price realignments. With slower inflation, unavoidable relative price changes would have required actual cuts to nominal prices and wages in lagging sectors, rather than just relatively slow rates of increase. I have been calling that “asymmetrical price stickiness,” which is a rather bloodless term, but it reflects a real psychological aversion by firms to resist price cuts and workers to resist wage cuts. Forcing those cuts would have meant lost jobs, personal and business bankruptcies, and loan defaults. Paradoxically, even though the peak rate of inflation might have been lower, the recovery would likely have been slower and accompanied by higher unemployment rates than what we actually saw in the second half of 2022.

Writing for the Financial Times, Raghuram Rajan, himself a former central bank head, laments how difficult it is for central bankers to establish the right kind of credibility. Should they focus entirely on establishing a reputation as fierce inflation fighters? Or should they let it be known they will accommodate higher inflation when appropriate? Rajan thinks the Fed played it too loose in 2021-2022. I think that whether by strategy or purely by luck, they got it just about right. 

The Fed needs to pay more attention to relative prices.

This commentary has highlighted the role of supply shocks and relative price changes in the 2021-2022 inflation. Fed officials are beginning to pay attention, too. In the presentation cited earlier, Fed Governor Cook includes a chart showing the dramatic divergence in inflation rates in three key sectors of the economy. She asks, “Would adopting a model with multiple price components improve our understanding of and ability to forecast overall inflation? Relatedly, should we look to inflation models with nonlinear or threshold effects?” My answers are, “Yes, and yes!” Relative price changes, both endogenous and exogenous, should be central to the Fed’s planning, not an afterthought. So too should the nonlinearities introduced by differential and asymmetrical price stickiness.

Neel Kashkari, president of the Minneapolis Fed, is another high official who is catching on to this. In a recent essay, he criticizes the Fed’s “traditional Phillips-curve models,” which consist of labor market effects via unemployment gaps, changes to long-run inflation expectations, and little more. These “workhorse models,” he says, “seem ill-equipped to handle a fundamentally different source of inflation” which he describes as “surge pricing inflation” – his own term for one kind of the relative price effects discussed here. 

“Can we,” asks Kashkari, “develop frameworks and tools to analyze and potentially forecast inflation outside of the labor market and expectations channels?” He answers himself in the affirmative. “If we can deepen our analytical capabilities surrounding other sources and channels of inflation, then we might be able to incorporate whatever lessons we learn into our policy framework going forward.”

A suitable model might start with a multi-sector input-output framework to trace the impacts that price increases in one sector, such as energy goods, has on others, from farming to freight transportation to plastics. A dynamic version of such a model could incorporate differential and asymmetric price and wage stickiness as price shocks are passed from one sector to another. By gaming out different monetary policy strategies, such a dynamic, nonlinear, asymmetric model could estimate the optimal degree of monetary accommodation in the face of various kinds of endogenous and exogenous shocks. I am far from having either the analytical firepower or the data needed to construct such a model, but the Fed, with its vast resources and hyper-talented staff, surely does.

Get ready for the post-moderation world.

It would be wonderful if we could breathe a sigh of relief that we got through the COVID-19 exit crisis with only a transitory bump in inflation, and could now look forward to renewal of the Great Moderation. But that isn’t going to happen.

For a laundry list of the shocks ahead, we can turn to the great Gloom Meister himself, Nouriel Roubini. Writing in December for Project Syndicate, Roubini listed five “wars” that cloud the economic future: hot or cold wars between the West and revisionist powers; a war against climate change and its effects; wars against pandemics and the demographic effects of aging populations; wars against disruptions from artificial intelligence and other new technologies; and wars against rising inequalities of income and wealth. As the wars themselves eat into output and desperate governments try to inflate their way out of unsustainable debt, Roubini sees the outcome as – you guessed it – global stagflation.

I’m not quite so pessimistic. In the short run, in the United States, the greater risk is likely to be a plain old recession without the inflation. Christina Romer, head of the Council of Economic Advisers in the Obama administration, explained why in a 2022 keynote address to the American Economic Association. The problem, which she illustrated vividly with a pair of charts, is that any policy moves by the Fed take about two years to affect output and unemployment. That means that sharp increases in interest rates since 2021 are just now becoming visible. Because of the long lags, says Romer, “policymakers are going to need to dial back before the problem is completely solved if they want to get inflation down without causing more pain than necessary.” A “soft landing” without recession is still possible, but the longer the Feds sticks to its strict anti-inflation program, the less likely that becomes.

Neither is 1970s-style stagflation in the cards in the longer term, at least not in the United States. The only way to get true stagflation would be to run both monetary and fiscal policy flat out for a decade or more, long enough to break the inflation expectations anchor. The Fed may make some mistakes, but nothing that big. If it gets busy and updates its models, based both on what has gone wrong and what has gone right in the past two years, there are real grounds to hope that the pessimists will be proved wrong again.

Originally published by Niskanen Center, Jan. 30, 2023. Reposted by permission.

[1] There seems to be no generally accepted metric for the volatility of relative prices. In Figure 2, I use monthly values of the standard deviation of rolling 3-month inflation rates across 11 CPI components: Energy goods, energy services, transportation services, new vehicles, used vehicles, food at home, food away from home, apparel, medical services, medical goods, and shelter. Those 11 account for about 80 percent of the CPI. 

[2] Economists are taught not to trust their eyes alone. Let V be the monthly value for the measure of price volatility. Let A be the monthly “inflation anomaly,” that is, the absolute value for a given month of the difference between the 3-month inflation rate and the average inflation rate over the preceding two years. The correlation of P with A is positive and statistically significant (R = 0.54). 

[3] See this earlier commentary for a more detailed explanation of the theory behind the next few paragraphs. 

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As We Sell Off Our Strategic Oil Reserves, Ponder This

As We Sell Off Our Strategic Oil Reserves, Ponder This

Authored by Bruce Wilds via Advancing Time blog,

One of Biden’s answers to combating…



As We Sell Off Our Strategic Oil Reserves, Ponder This

Authored by Bruce Wilds via Advancing Time blog,

One of Biden's answers to combating higher gas prices has been to tap into America's oil reserves. While I was never a fan of the U.S. Strategic Petroleum Reserve (SPR) program, it does have a place in our toolbox of weapons. We can use the reserve to keep the country running if outside oil supplies are cut off. Still, considering how out of touch with reality Washington has become, we can only imagine the insane types of services it would deem essential next time an oil shortage occurs.

Sadly, some of these reserves found their way into the export market and ended up in China. We now have proof that the President's son Hunter had a Chinese Communist Party member as his assistant while dealing with the Chinese. Apparently, he played a role in the shipping of American natural gas to China in 2017. It seems the Biden family was promising business associates that they would be rewarded once Biden became president. Biden's actions could be viewed as those of a traitor or at least disqualify him from being President.

The following information was contained in a letter from House Oversight Committee ranking member James Comer, R-Ky. to Treasury Secretary Janet Yellen dated Sept. 20. 

"The President has not only misled the American public about his past foreign business transactions, but he also failed to disclose that he played a critical role in arranging a business deal to sell American natural resources to the Chinese while planning to run for President.”

Joe Biden, Comer said, was a business partner in the arrangement and had office space to work on the deal, and a firm he managed received millions from his Chinese partners ahead of the anticipated venture. While part of what Comer stated had previously been reported in the news, the letter, cited whistleblower testimonies, as well as emails, a corporate PowerPoint presentation, and a screenshot of encrypted messages. These as well as  bank documents that committee Republicans obtained suggest Biden’s knowledge and involvement in the plan dated back to at least 2017.

The big point here is;

  • The Strategic Petroleum Reserve, which was established in 1975 due to the 1973 oil embargo, is now at its lowest level since December 1983.

In December 1975, with memories of gas lines fresh on the minds of Americans following the 1973 OPEC oil embargo, Congress established the Strategic Petroleum Reserve (SPR). It was designed “to reduce the impact of severe energy supply interruptions.” What are the implications of depleting the SPR and is it still important?

The U.S. government began to fill the reserve and it hit its high point in 2010 at around 726.6 million barrels. Since December 1984, this is the first time the level has been lower than 450 million barrels. Draining the SPR has been a powerful tool for the administration in its effort to tame the price of gasoline. It also signaled a "new era" of intervention on the part of the White House. 

This brings front-and-center questions concerning the motivation of those behind this action. One of the implications of Biden's war on high oil prices is that it has short-circuited the fossil investment/supply development process.  Capital expenditures among the five largest oil and gas companies have fallen as the price of oil has come under fire. The current under-investment in this sector is one of the reasons oil prices are likely to take a big jump in a few years. Production from existing wells is expected to rapidly fall.

The Supply Of Oil Is Far More Constant And Inelastic Than Demand

It is important to remember when it comes to oil, the supply is far more constant and inelastic than the demand. This means that it takes time and investment to bring new wells online while demand can rapidly change. This happened during the pandemic when countries locked down and told their populations and told them to stay at home. This resulted in the price of oil temporarily going negative because there was nowhere to store it.

Draining oil from the strategic reserve is a short-sighted and dangerous choice that will impact America's energy security at times of global uncertainty. In an effort to halt inflationary forces, Biden released a huge amount of crude oil from the SPR to artificially suppress fuel prices ahead of the midterm elections. 

To date, Biden has dumped more SPR on the market than all previous presidents combined reducing the reserves to levels not seen since the early 1980s. In spite of how I feel about the inefficiencies of this program, it does serve a vital role. It is difficult to underestimate the importance of a country's ability to rapidly increase its domestic flow of oil. This defensive action protects its economy and adds to its resilience. 

Biden's actions have put the whole country at risk. Critics of his policy pointed out the Strategic Petroleum Reserve was designed for use in an emergency not as a tool to manipulate elections. Another one of Biden's goals may be to bring about higher oil prices to reduce its use and accelerate the use of high-cost green energy.

Either way, Biden's war on oil has not made America's energy policies more efficient or the country stronger.

Tyler Durden Sat, 03/25/2023 - 18:30

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The Disinformation-Industrial Complex Vs Domestic Terror

The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation…



The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation has been elevated to a national security imperative under the Biden administration, as codified in its first-of-its-kind National Strategy for Countering Domestic Terrorism, published in June 2021.  

That document calls for confronting long-term contributors to domestic terrorism.

In connection therewith, it cites as a key priority “addressing the extreme polarization, fueled by a crisis of disinformation and misinformation often channeled through social media platforms, which can tear Americans apart and lead some to violence.” 

Media literacy specifically is seen as integral to this effort. The strategy adds that: “the Department of Homeland Security and others are either currently funding and implementing or planning evidence–based digital programming, including enhancing media literacy and critical thinking skills, as a mechanism for strengthening user resilience to disinformation and misinformation online for domestic audiences.” 

Previously, the Senate Intelligence Committee suggested, in its report on “Russian Active Measures Campaigns and Interference in the 2016 Election” that a “public initiative—propelled by Federal funding but led in large part by state and local education institutions—focused on building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.” 

In June 2022, Democrat Senator Amy Klobuchar introduced the Digital Citizenship and Media Literacy Act, which – citing the Senate Intelligence Committee’s report – would fund a media literacy grant program for state and local education agencies, among other entities. 

NAMLE and Media Literacy Now, both recipients of State Department largesse, endorsed the bill. 

Acknowledging explicitly the link between this federal counter-disinformation push, and the media literacy education push, Media Literacy Now wrote in its latest annual report that ... 

... the federal government is paying greater attention to the national security consequences of media illiteracy.

The Department of Homeland Security is offering grants to organizations to improve media literacy education in communities across the country. Meanwhile, the Department of Defense is incorporating media literacy into standard troop training, and the State Department is funding media literacy efforts abroad.

These trends are important for advocates to be aware of as potential sources of funding as well as for supporting arguments around integrating media literacy into K-12 classrooms. 

When presented with notable examples of narratives corporate media promoted around Trump-Russia collusion, and COVID-19, to justify this counter-disinformation campaign, Media Literacy Now president Erin McNeill said: “These examples are disappointing.”

The antidote, in her view is, “media literacy education because it helps people not only recognize the bias in their news sources and seek out other sources, but also to demand and support better-quality journalism.” (Emphasis McNeill’s)

Tyler Durden Sat, 03/25/2023 - 17:30

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Disney World Event Gives Florida Gov. DeSantis the Middle Finger

Walt Disney’s CEO Bob Iger has shown no willingness to back down in the face of the governor’s efforts to campaign against diversity training.



Walt Disney's CEO Bob Iger has shown no willingness to back down in the face of the governor's efforts to campaign against diversity training.

Florida Gov. Ron DeSantis has made Disney World, one of his state's largest employers, the target of his so-called war on woke. 

At the root of the dispute are former Walt Disney (DIS) - Get Free Report CEO Bob Chapek's remarks opposing the Republican governor's new law, which limits the ability of educators to discuss gender identity and sexual orientation with children.

Labeled the Don't Say Gay bill, the law met with huge pushback from Disney employees, who had criticized Chapek for initially not speaking out against the bill.

That led the then-Disney boss to take a direct stand against the governor's actions, which in turn led DeSantis to strip the company of its special tax status.  

DON'T MISS: Huge Crowds Force Disney World to Make Big Changes

DeSantis has decided to use Disney as the center of his political-theater culture war because it's an easy, and nonmoving, target. The company can't pack up Disney World and move it to New York, Massachusetts, or some other liberal bastion, so it mostly has to take whatever the governor dishes out.

But while DeSantis wants to use Disney as a target, he's mostly playing to the cameras; clearly, he's not actually looking to take down the largest single-site employer in the U.S. Disney World generates tens of thousands of jobs, pays the state a lot of money. and brings in billions of tourism dollars -- many of which are spent outside its gates in the broader Florida economy.

Image source: Shutterstock/TheStreet Illustration

Disney CEO Iger Uses Actions, Not Words

Disney CEO Bob Iger understands that actions speak louder than words and words can come back to haunt you.

The returned Mouse House boss has not called out DeSantis, nor did he fight the governor's takeover of its Reedy Creek Improvement District.

On paper, Disney World appears to have lost its right to self-govern. That's true, but it doesn't mean much because it's not as if the state -- even DeSantis's handpicked cronies who now oversee the former Reedy Creek Improvement District -- intend to actually get in Disney's way. The company prints money for the state.

So, that's why Iger -- who had publicly spoken against the Don't Say Gay bill when he was a private citizen and not Disney CEO, has not called out DeSantis. A speech decrying the governor's actions, pointing out that they “put vulnerable, young LGBTQ people in jeopardy,” as he said before taking the CEO job back, would not help Disney.

Instead, Iger has let his company's actions speak. 

Disney World plans to host a "major conference promoting lesbian, gay, bisexual and transgender rights in the workplace" at the Disney World Resort this September, the Tampa Bay Times reported.

Disney Boldly Challenges DeSantis

Disney World will host the annual Out & Equal Workplace Summit in September.

"The largest LGBTQ+ conference in the world, with more than 5,000 attendees every year. It brings together executives, ERG leaders and members, and HR and DEI professionals and experts -- all working for LGBTQ+ equality," the event's organizer, Out & Equal, said on its website. 

"Over more than 20 years, Summit has grown to become the preferred place to network and share strategies that create inclusive workplaces, where everyone belongs and where LGBTQ+ employees can be out and thrive." 

The Tampa Bay Times called simply hosting the event "a defiant display of the limits of DeSantis’s campaign against diversity training."

Disney World has hosted the event previously and the company has a relationship with Out & Equal going back many years.

Instead of giving a speech and becoming even more of a right-wing-media talking point, Iger showed his employees where Disney stands through his actions. It's a smart choice by a seasoned executive not to become an actor in DeSantis's political theater.

The Florida governor wants to be perceived as battling 'woke" Disney without actually hurting his state's relationship with the company. The newspaper described exactly how that works when it looked at the new government powers the state has taken from the theme park giant.

The subsequent legislation left most of Disney’s special powers in place despite the governor’s attempt to dissolve the district. The conservative members the governor appointed to the board hinted at the first meeting of the new board that they would exercise leverage over Disney, such as prohibiting COVID-19 restrictions at Disney World. But legal experts have said that the new board’s authority has no control over Disney content.

DeSantis wants a culture war, or at least one that'll play out in the media. Iger knows better and has played the situation perfectly.   


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