USA Today Clearly Doesn’t Understand Inflation as they Debunk Meme

  • USA Today doesn’t understand inflation, yet tries to debunk meme that explains it succinctly
  • Fact checker keeps using different economic terms not realizing they have different meanings
  • Fact checker manages to debunk themselves

OUR RATING: Major Negligence. MSNBC-level basic journalistic negligence

Indicted Outlet: Valerie Pavilonis | USA Today | Link | Archive | 4/14/22

A USA Today intern who clearly has no idea what she’s writing about tries to wade into the somewhat-complex world of monetary policy.

In so doing she doesn’t understand what she’s reading, misreads charts, and is a humorless killjoy who didn’t or couldn’t understand a relatively simple libertarian meme:

May be an image of 1 person and text that says 'classicalliberty @jsolom100 They printed $8 Trillion, gave you $1400, sent the rest to their friends, and left you with inflation. 8:20 PM 4/5/22 Twitter for iPhone'

Major Violations:

  • Government Genuflect
  • Misrepresentation
  • Superficial Investigation

Let’s just get Val’s errors out of the way here, first. Her article is a hot mess of sophistry and economic illiteracy.

The Federal Reserve does have a balance sheet of $9 trillion, but it hasn’t added $8 trillion anytime recently. And that number isn’t close to accurate in terms of physical cash, of which there is about $2 trillion currently in circulation, according to Lydia Washington, a spokesperson for the Department of the Treasury’s Bureau of Engraving and Printing.

This is what we call the Government Genuflect. It’s asking the government if they’ve done a bad, and then reporting they haven’t when they lie and say they haven’t.

But what’s also going on here is that fact-check Val is interchangably using different terms that mean different things, and creating substantial confusion in the process. At one point she’s talking about printing as it relates to currency in circulation, which is one topic, at another point she’s referencing the economic term ‘M1‘, which includes both circulating currency but also adds short-term deposits, and elsewhere she’s referring to the Federal Reserve’s asset balance sheet.

These are not the same thing. And the reporter is trying to debunk the meme by considering each, without understanding each concept.

It’s a stupendously poorly written article. No surprise it’s used, then, as a fact-check article by social media giants to suppress speech.

Val does focus on the asset balance issue for a hot minute in the article though, which is good:

In an email, Kolvet pointed to news reports from June 2021, which said the Federal Reserve’s assets had topped $8 trillion. “Printing” is a common term for when the Federal Reserve injects non-paper money into the financial system.

That was indeed a sharp increase from past practice, as the assets had hovered around $4 trillion from 2014 to 2020. The asset balance is currently about $9 trillion.
The asset balance is actually the real issue. That’s what the meme is referencing. And it indeed shows that the meme is substantially correct. [1]
Not to deconstruct the joke, but the basic idea is thus:
1) The Federal Reserve, as understood as protecting the financial interests of elites, printed $8 trillion that sits as ‘assets’ on their books.
2) The elites, then, gave the public $1400 ‘stimulus’ checks in order to make them feel as though they were sharing in the wealth.
3) The rest of the money went to either bailout or subsidize their elite friends.
4) And the bill is left to the public to pay via inflation, confiscating the value of everything by devaluing the monetary instrument.
All of this is what actually happened.
Instead of admitting that, Val complains that the meme doesn’t have a timeline in its joke and therefore has to be wrong because she can’t easily verify it:
But the post’s use of the Biden picture implies a connection between that figure and his administration. But Federal Reserve assets have only grown by about $1.6 trillion since he took office in January 2021.

The only way the post’s claim about “printing” $8 trillion in this fashion adds up is if one tallies the money injected by the Federal Reserve over the last decade and a half. The post contains no language referencing such an extended timespan.

The meme references no timeline whatsoever. What it means is that the Federal Reserve printed that much money and the public got crumbs, and the rest is burned off through the economy as inflation.
This joke isn’t complicated. Clearly Val doesn’t know any libertarians.
Val also didn’t take a basic economics course when she then writes:
In exchange for adding newly-made, non-paper dollars to major banks in the U.S., the Fed is receiving large amounts of bonds. As a result, banks have more cash on hand and are more willing to lend that cash. Combined with lower interest rates, those who need to borrow money find it easier to do so.
lol this is called ‘the inflation’ Val. It’s also called debunking your own fact-check. 
Let’s zero in on the key phrase here, that USA Today Intern Val wrote herself:
In exchange for adding newly-made, non-paper dollars to major banks in the U.S., the Fed is receiving large amounts of bonds. As a result, banks have more cash on hand and are more willing to lend that cash.

Gosh, could you call ‘adding’ another word like, oh I don’t know, ‘printing’ instead?

Could those ‘large amounts of bonds’ that were backed by ‘non-paper dollars’ that are now sitting in ‘major banks’ who now have ‘more cash on hand’ possibly lead to something called ‘inflation’?

Here are more gems from Val:

Another social media user who shared the claim told USA TODAY it was based on data from the Federal Reserve of St. Louis showing the amount of “M1” currency in circulation.

While M1 currency includes cash, it also includes other liquid categories such as money in checking accounts. As a result, M1 data shouldn’t be used to draw conclusions about the amount of printed currency in circulation.

The $8 trillion is even further off base in terms of the physical cash printed – which many social media users thought the post was referring to.

If Val had even taken two seconds to research M1, and possibly seen a graph of M1, [2] she may have answered her own question.

Here it is:

Yes, a lot of money was artificially created, and that artificial infusion of cash is having ripple effects throughout the economy.

The actual meme in question though is obviously not about M1.

This ‘fact check’ at the USA Today by their intern is suppressing an accurate meme being shared on social media.

Here is the meme in question:

May be an image of 1 person and text that says 'classicalliberty @jsolom100 They printed $8 Trillion, gave you $1400, sent the rest to their friends, and left you with inflation. 8:20 PM 4/5/22 Twitter for iPhone'

Here is a visual display of the visible suppression:

It is no doubt being used to ‘shadow ban’ the spread of the meme elsewhere.[3][4]

Even though the meme is true: the Federal Reserve did create $8 trillion. [5]

And that enormous balance is tied to inflation. [6]

Since the pandemic began, the nation’s central bank has aggressively printed trillions of dollars to keep the U.S. economy afloat. Doing so has ballooned the Federal Reserve’s balance sheet to nearly $9 trillion.

Fed officials, acknowledging the rising risks posed by inflationary pressures, are now starting to think about whether or not they can move to shrink the central bank’s holdings next year.

Such bogus fact-checks are also used as ‘strikes’ in social media parlance, to demonetize groups, pages, content creators who share such memes.

You can’t offend the fact check gods without paying a very real financial price that they can exact through their own fact-check industrial complex, often paid for by social media companies themselves who fund and finance these fact-check operations.

Even when, like intern Val, they’re completely wrong.

OUR RATING: Major Negligence. MSNBC-level basic journalistic negligence

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