Let’s talk about inflation
(or, how to give bad news)
Last week, someone pointedly said to me “You probably think inflation is transitory”, before later throwing in an “Ok, Boomer”.
It was said over a drink at the pub and clearly meant in jest (and aimed at my rapidly increasing year count), but it stuck with me. So, let’s talk about inflation.
The official line from the Fed remains that the highest monthly inflation rate in 30 years is a temporary aftereffect of the pandemic, still winding its way through the supply chain.
But this explanation isn’t seeming to pass the pub test for most Americans. After all, gas (petrol for our international readers) prices in the US are at multi-year highs and everything from used cars to turkeys (it’s Thanksgiving week in the US) is more dear than it was a year ago.
It’s increasingly clear that inflation may not be transitory and that the skeptics aren’t going to be won over by carefully crafted words from the Fed.
The Biden Administration is only now starting to tweak their messaging on inflation. But it might be too little, too late.
The most important lesson we can take from their missteps is that there are four principles that are critical to follow when delivering bad news:
Be first
Be clear
Be truthful
Be accountable
Unfortunately, there isn’t much about the Biden Administration’s communications approach to inflation that has followed this guidance. Let’s break down what they did wrong so we can learn from their missteps.
Being second
As Democrats spent the summer trying to pretend inflation wasn’t an issue, Republicans were far ahead of the Administration in sounding the alarm that this isn’t transitory. Biden is finally acknowledging the reality, but has been flat footed. This let Republicans define the (politically expedient, but incorrect) narrative that Democratic overspending is spurring inflation.
Being vague and half-true
Democrats spent too long pretending inflation was going to go away, then saying it was only in a few types of products, then blaming it on greedy multinational companies. Even though Biden is mostly correct that the primary driver of inflation is (still) related to the pandemic (and is acknowledging this will persist for much of 2022), the half-truths leading up to this point have prevented them from establishing an easy to understand explanation that is factual and can be easily repeated.
Being one of many faces
Biden spent too long delaying addressing the issue and let appointees and supporters try to carry the bag. Being slow to define his story created a leadership vacuum. It’s crucial to have one established voice when communicating bad news to ensure your audience understands who is “in charge”. Biden seems to be getting to this point, but has taken too long to do it.
What do you think? Can the Biden Administration turn around their message enough to keep Democrats in control in 2022?