Who gets blamed when prices rise — and the four-decade pattern of U.S. inflation attribution that has held across eight inflationary episodes spanning eight decades.
In August 1971, in the same television address in which President Richard Nixon announced the closure of the gold window and a ten-percent surcharge on imported goods, he announced a ninety-day wage and price freeze. The freeze was administered by a newly created Cost of Living Council. In Nixon’s speech, the freeze was framed not as a response to producer pricing power but as a response to wage pressure from organized labor and to the inflationary expectations such pressure had created. The phrase wage-price spiral appeared throughout the discourse of the period. The implication, which the country’s economists and editorial pages largely did not contest, was that the spiral originated with workers and ended with prices.
Fifty years later, in February 2021, the economist Lawrence Summers published a Washington Post op-ed warning that the American Rescue Plan’s stimulus was “the least responsible macroeconomic policy” in forty years and would generate inflationary pressure that the Federal Reserve would have to discipline through monetary tightening. Summers’s analysis, criticized at the time, became the consensus interpretation of the 2021–2022 inflation. The dominant explanations within that interpretation rotated through the news cycles — supply chains, then stimulus, then wages, then expectations, then again wages — and arrived, eventually and reluctantly, at the recognition that concentrated firms in consumer-facing sectors had used the moment of widespread price uncertainty to expand margins. By the time the recognition arrived, the Federal Reserve had executed two years of interest rate increases that disciplined workers, renters, and small businesses but did not directly constrain the firms whose pricing decisions had been a major driver of the inflation.
The two episodes are separated by half a century and by very different macroeconomic conditions. They share a common feature: in each, the dominant explanations of rising prices ran downward toward workers and consumers, outward toward foreign actors and supply shocks, and only late and partially toward firms with pricing power and the institutional arrangements that allow that power to be exercised. This article is about why that pattern is so durable, what it protects, and how it operates.
Begin with the question almost no one in mainstream U.S. coverage asks: what is inflation attribution?
Operationally, inflation attribution is the political-economic process by which causation is assigned when the general price level rises. It is not a single act. It is the cumulative effect of countless statements made by Federal Reserve officials, Treasury officials, members of Congress, presidential administrations, financial press editors, mainstream economists, think-tank analysts, industry associations, and political communications operations. Each statement allocates causation among a finite set of available explanations. The aggregate of those allocations becomes what caused the inflation in public discourse, in policy response, and in the institutional memory that informs the next inflationary episode.
A different framing is operationally relevant. Inflation is not a single phenomenon with a single cause. It is the headline aggregation of a great many distinct pricing events occurring simultaneously across thousands of firms, sectors, and supply chains. Some of those events are the result of demand-side pressure. Some are the result of input cost shocks. Some are the result of structural pricing decisions by firms with market power. Some are the result of central-bank policy choices. Some are the result of fiscal-policy choices. Some are the result of climate or geopolitical shocks. The relative contribution of each is, in any given episode, an empirical question that requires sectoral analysis, firm-level pricing data, market-concentration data, and the kind of institutional research infrastructure that can disentangle the contributing factors.
The U.S. discourse around inflation operates within a much narrower vocabulary. The legitimate range of attributions is dominated by demand-side explanations — consumers spending too much, workers demanding too much, government spending too much, monetary expansion — supply-side shocks attributable to external actors (OPEC, supply chains, weather), and central-bank policy adjustments. Pricing power in concentrated sectors enters the legitimate range only intermittently and against substantial professional resistance. The narrowing of the legitimate range is itself an institutional output — produced by the curriculum of mainstream U.S. macroeconomics, the communications conventions of the Federal Reserve, the editorial conventions of the financial press, the messaging infrastructure of the corporate sector, and the political incentives of incumbent administrations of both parties.
This is an ontological claim about what inflation is. It is contestable, and it has been contested. The institutional economists of the immediate postwar period — John Kenneth Galbraith, Wassily Leontief, the structural inflation theorists of the 1970s — the heterodox-economics literature on administered prices and conflict inflation, the post-Keynesian literature on cost-plus pricing, and most recently the sellers’ inflation literature emerging from the University of Massachusetts Amherst (Isabella Weber and Evan Wasner) have all argued for a broader range of legitimate attributions. The IMF, the European Central Bank, and the Bank for International Settlements have, since 2023, partially absorbed the broader range. The U.S. mainstream press has not. The contestation has been substantially confined to specialty publications and to international institutional venues.
Narrative laundering is the process by which a measurement or causal claim is converted, through institutional repetition, into the description of a phenomenon that exceeds the measurement or claim. In the inflation-attribution context, the operation is specific: a particular subset of available causal explanations is repeated until it appears to constitute the legitimate range, while explanations outside the subset are treated as fringe, ideological, or politically motivated. The result is a discourse in which inflation is explained primarily through downward and outward attribution — workers, consumers, fiscal stimulus, foreign actors — and in which upward attribution to firms with pricing power and the institutional arrangements that produce that power is structurally marginal.
The mechanism rarely operates alone. Its dominant pairing is narrative laundering plus legitimacy shielding plus possibility closure, with reinforcement from information asymmetry (Family 5) and public capacity drain (Family 6). This is a Family 7-led signature consistent with several other articles in this collection, but with a specific operational signature in the inflation context.
Legitimacy shielding is the function the dominant attribution performs in the discourse. A claim that wages caused inflation, accompanied by a Federal Reserve speech and a Wall Street Journal editorial, appears to draw on professional and institutional authority that the claim itself could not generate. The same claim about firm pricing power, even when accompanied by IMF research and ECB analysis, does not draw on the same level of automatic professional authority within the U.S. discourse. The asymmetry of authority between the two attributions is itself a structural feature of the discourse.
Possibility closure is the function performed when alternative attributions are excluded from the legitimate range. The exclusion does not require explicit dismissal. It requires only that the alternative attributions are not surfaced in the venues where inflation is being discussed, are treated as advocacy rather than analysis when they do surface, and are professionally penalized within the academic and journalistic institutions whose practitioners might otherwise advance them. The 2022–2023 reception of the sellers’ inflation thesis in the U.S. mainstream press is a contemporary example of the mechanism in operation.
Information asymmetry is the structural condition that sustains the legitimacy and possibility-closure mechanisms. The data infrastructure for tracking aggregate wage growth, monetary aggregates, fiscal flows, and supply-chain disruption is enormous and continuously updated. The Bureau of Labor Statistics’ Employment Cost Index, the Federal Reserve’s H.6 release on monetary aggregates, the Treasury’s daily statements, and the various supply-chain pressure indices are produced on rapid cycles and reach the financial press in real time. The data infrastructure for tracking firm-level pricing decisions, sector concentration, and pricing power dynamics is, by comparison, threadbare. The Federal Reserve’s Beige Book contains anecdotal sector-level pricing information. The Bureau of Labor Statistics’ Producer Price Index disaggregates by industry but not by firm. Sector concentration data is produced by the Census Bureau on a five-year cycle. The asymmetry of data infrastructure produces a corresponding asymmetry in what can be discussed in real time.
Public capacity drain is the downstream consequence. The federal antitrust apparatus that could enforce structural responses to pricing power has operated under flat or declining real budgets for most of the past four decades, while the financial-sector regulatory apparatus has maintained or grown its capacity. The Federal Reserve’s Board of Governors and twelve regional Reserve Banks employ approximately twenty-two thousand staff. The Federal Trade Commission and the Antitrust Division of the Department of Justice combined employ approximately twenty-five hundred staff. The asymmetry of institutional capacity produces a corresponding asymmetry in which inflationary pressures the federal government is operationally equipped to address.
The structural pillars that produce the durable pattern of U.S. inflation attribution are four.
The first is the dominant macroeconomic paradigm taught in U.S. graduate economics programs since the late 1970s. The paradigm centers the Phillips Curve relationship between unemployment and inflation, the natural rate of unemployment hypothesis, the expectations-augmented theory of inflation pioneered by Milton Friedman and Edmund Phelps, and the rational-expectations modifications introduced by Robert Lucas. Within this framework, inflation is driven by the gap between actual and natural unemployment, by inflation expectations, and by demand-side pressure. Pricing decisions by firms enter the framework only as price-takers responding to demand conditions; firms with market power are abstracted away into representative-agent models that assume competitive markets. This framework is what most U.S. economists working at the Federal Reserve, the Treasury, the Council of Economic Advisers, and the major financial-press outlets have been trained in. It does not contain the analytic vocabulary for sellers’ inflation as a primary causal account.
The second pillar is the Federal Reserve’s communications architecture. The Federal Reserve communicates about inflation through quarterly Summary of Economic Projections releases, eight-times-yearly post-FOMC press conferences, semi-annual Monetary Policy Reports to Congress, regular speeches by Federal Reserve governors and regional presidents, and the daily commentary of Fed-watchers in the financial press. Each of these venues is structured around the Fed’s policy toolkit, which is dominated by the federal funds rate. Because the policy toolkit is structured around demand-side intervention through interest rates, the communications discourse is structured around demand-side attributions of inflationary pressure. The Fed cannot, with its existing toolkit, address pricing power directly; it therefore tends not to attribute inflation to pricing power in the venues where it communicates about inflation.
The third pillar is the financial press infrastructure. As the companion pieces on the market and the economy and on number numbness in this collection document, the financial press operates on velocity and on a vocabulary built for capital allocators. Its inflation coverage is dominated by Fed-watching, by labor-market data interpretation, by supply-chain analysis, and by the corporate earnings of the firms covered as investment opportunities. The structural relationship between the financial press and the firms whose pricing decisions might be implicated in an inflationary episode is one of revenue dependence — the firms are the subjects of paid coverage, the advertisers, and in many cases the audience of the publication. The structural pressure is not toward dishonesty but toward the kind of polite, sustained, professional attribution preference that produces the observed pattern.
The fourth pillar is the corporate-side messaging infrastructure. The U.S. Chamber of Commerce, the National Association of Manufacturers, the various sector-specific trade associations, and the corporate communications offices of individual firms each operate with the function, in part, of advancing causal narratives about inflation that direct attention away from firm pricing decisions. This work appears in op-ed pages, in congressional testimony, in regulatory comment letters, and in the briefings provided to financial-press journalists. It is professional, well-funded, and continuous. It does not require collusion or malice; it requires only that the actors performing the work do so within the incentives of their employers. The cumulative effect across the corporate sector is a steady pressure on the inflation discourse to attribute price increases to factors other than firm pricing decisions.
These four pillars are mutually reinforcing. The macroeconomic curriculum produces analysts whose vocabulary directs attention toward demand-side explanations. The Federal Reserve communicates within that vocabulary. The financial press transmits the Fed’s communications. The corporate-side messaging infrastructure reinforces the resulting frame in adjacent venues. The methodology that would let a reader interrogate the resulting attributions — sector concentration data, firm-level pricing analyses, sectoral inflation decompositions — is technically available but operationally absent from the venues where inflation is being discussed.
The beneficiaries of the durable U.S. attribution pattern are the firms with pricing power whose decisions remain outside the legitimate range of inflation explanations, the asset-holders whose wealth tends to appreciate during inflationary periods (real assets, equities in firms with pricing power, commodities), the financial-services industry that intermediates the asset appreciation, and the credentialed economist class that maintains the framework. Politicians of both parties benefit when the attribution pattern allows them to advance specific causal narratives — Republican administrations have historically attributed inflation to Democratic spending and to wage demands; Democratic administrations have historically attributed inflation to Republican-era deregulation and to corporate consolidation — while neither party has historically advanced structural reform of pricing power as a primary inflation response.
The burden falls in the obvious places. It falls on workers whose nominal wage gains are framed as the cause of inflation rather than as a partial response to it. The Federal Reserve’s interest rate increases from March 2022 through July 2023 were justified to the public substantially through the wage-attribution framing. The cooling of the labor market that resulted — declining quits, declining job openings, slower wage growth at the bottom of the distribution than at the top — was the operational consequence of the framing. Workers absorbed the discipline that the discourse had identified them as deserving.
It falls on consumers whose purchasing power is eroded by the price increases and then framed, through the demand-side attribution, as the cause of the erosion. The implicit logic of the U.S. inflation discourse is that consumers ought to spend less, that they ought to defer purchases, that they ought to reduce their expectations of future price levels. The logic locates agency in the consumer’s spending decision rather than in the firm’s pricing decision. The household experience of inflation is thus an experience both of the price increases and of being told that they are responsible for them.
It falls on public deliberation. A democracy whose inflation discourse cannot legitimately consider sectoral pricing power as a primary causal account cannot legitimately consider sectoral pricing power as a primary response. The structural responses that would address the actual mechanism — antitrust enforcement, sectoral price regulation, profit caps, federal price-monitoring capacity — are foreclosed not by direct argument but by the prior exclusion from the legitimate range of explanations. The political debate about inflation in the United States has been conducted, for forty years, in a vocabulary that does not include the most consequential structural responses available to the federal government.
And the burden falls, again, on the political imagination. A generation of Americans has come of age inside an inflation discourse that systematically directs attention away from concentrated sectoral pricing and toward worker behavior, consumer behavior, fiscal policy, and central bank policy. The 2024 election cycle’s inflation discourse was conducted entirely within this vocabulary, with both major parties advancing variants of demand-side and external-shock attribution while neither advanced structural antitrust enforcement as a primary inflation response despite the Federal Trade Commission’s 2023 Merger Guidelines and the Department of Justice’s revived antitrust posture during the period.
The phrase doing the most work across multiple inflationary episodes is wage-price spiral. The phrase has been continuously deployed in U.S. economic discourse since at least the 1946–1947 postwar inflation, was central to the 1971 Nixon administration’s framing, was the master template for the 1973–1982 Great Inflation discourse, and was reanimated in 2021–2022 by Lawrence Summers, by the Wall Street Journal editorial board, and by Federal Reserve communications. The phrase carries an implicit causal direction: workers demand higher wages, firms pass the wage costs through as higher prices, workers respond with further wage demands, and the spiral accelerates. The empirical record of the framework’s primary application — the 1970s — is contested in the economic literature, with much of the price increase attributable to oil shocks rather than to wage demands, and with the reverse causation (wages responding to prices rather than driving them) substantially supported by the time-series data. The framework has nonetheless persisted as the master template for U.S. inflation discourse, because its rhetorical work — locating causation in worker behavior — is durable.
Adjacent variants perform the same function. Demand-driven inflation directs causation to consumers. Stimulus-driven inflation directs causation to fiscal policy. Loose monetary policy directs causation to the Fed’s prior policy stance. Inflation expectations directs causation to the psychological state of consumers and businesses, with the implicit corrective being that the Fed must demonstrate hawkishness to anchor expectations. Supply chain disruption directs causation to external logistics. Each of these phrases is, in specific applications, technically defensible. None is, on the operational record of recent inflationary episodes, the dominant cause. The aggregate effect of the framework — multiple available attributions, all directing causation away from firm pricing power — is to produce a discourse in which firm pricing power is structurally absent from the conversation.
When firm pricing power does enter the conversation, the framework deploys a specific set of dismissals. Greedflation, when the term emerged in 2022, was treated in much of the U.S. financial press as a partisan slur rather than as an empirical claim, even after the IMF and ECB had vindicated the substantive proposition the term was awkwardly trying to express. The professional epithet for the analysis is populist or advocacy-driven. The dismissals function as legitimacy shielding: the conversion of a specific analytical claim into a generalized rhetorical category that can be excluded from serious consideration without engaging the substance.
The counter-mechanisms the dominant frame rules out are well-established categories of public economic action. Antitrust enforcement and structural separation would address the concentration that produces pricing power. Price regulation and rate-setting would constrain the use of that power in essential sectors during periods of stress. Profit caps and windfall profit taxes would recover the rents extracted during such periods. Federal price-monitoring capacity — a peacetime equivalent of the sector-level pricing intelligence the wartime Office of Price Administration produced — would provide the data infrastructure for sectoral attribution that does not currently exist. Comparative policy reporting would pair U.S. inflation analysis with the analyses produced by international institutions that have absorbed the sellers’ inflation thesis.
The first precedent is American and historical. The Office of Price Administration, established by the Emergency Price Control Act of 1942, regulated prices on roughly ninety percent of U.S. consumer goods at peak. As the companion piece on inflation in this collection documents, the OPA’s operational record is unambiguous: federal price administration at scale held inflation below five percent annually for the duration of World War II despite massive wartime demand and supply constraints. The specific element of the OPA framework most relevant to the present article is its sector-level pricing intelligence capacity — a federal infrastructure for monitoring, analyzing, and acting on firm-level pricing decisions. The capacity was dismantled by 1947 and has not been rebuilt at the federal level. Its absence is the structural condition under which the U.S. inflation discourse cannot legitimately consider sectoral pricing power as a primary causal account.
The second precedent is foreign and recent. The European Central Bank, in a series of staff papers and Working Papers published from 2022 onward, has developed a methodological framework for decomposing inflation into wage-driven, profit-driven, and import-driven components. The ECB’s analyses have attributed substantial portions of recent eurozone inflation to corporate margin expansion and have publicly named the mechanism. The methodology is publicly documented. The decompositions are produced on a regular cycle. The U.S. Federal Reserve has not produced an equivalent decomposition framework or absorbed the ECB methodology into its own analyses. The asymmetry of analytic infrastructure between the two central banks is the structural condition under which a profit-driven inflation episode in the United States can be acknowledged in international institutional venues but not in the venues where U.S. inflation is being discussed.
The third precedent is foreign and recent. The United Kingdom’s Energy Profits Levy of May 2022, the Spanish windfall taxes on energy and large banks of 2022, the Italian energy windfall tax of 2022, and the European Union’s coordinated framework demonstrate that windfall profit recovery is operationally feasible when the political coalition exists to enact it. The U.S. does not have an equivalent national windfall tax. Its absence during the 2021–2022 episode was the operational consequence of the attribution pattern this article describes: an inflation discourse that did not legitimately consider firm pricing power as a primary driver could not, internally consistently, support a windfall recovery instrument as a primary response.
The fourth precedent is American and recent. The Federal Trade Commission’s 2023 Merger Guidelines, the Department of Justice’s revived antitrust enforcement posture during the same period, and the Inflation Reduction Act of 2022’s authorization of CMS drug-price negotiation each represent partial counter-movements within U.S. policy. They are limited in scope and have been partially rolled back in subsequent administrations. They establish the category of structural antitrust response without yet operationalizing it at the scale that would make it a primary inflation response.
The reframing is this: inflation attribution in the United States is not a neutral analytic process. It is an institutional output produced by a specific architecture — graduate economics curricula, central-bank communications conventions, financial-press editorial conventions, corporate-side messaging infrastructure — that produces consistent results across multiple inflationary episodes spanning eight decades. The consistent result is a discourse in which inflation is attributed downward (toward workers and consumers), outward (toward foreign actors and supply chains), and to demand-side or central-bank policy choices, while attribution to firms with pricing power and to the institutional arrangements that produce that power is structurally marginal.
The pattern is not natural. It is institutional. The institutions that produce it were assembled, over time, by named actors making particular choices. They can be modified. The countries and historical periods in which different attribution architectures have operated demonstrate that the U.S. pattern is one of several available. The 1946–1947 OPA discourse acknowledged firm pricing as a primary causal account. The 2022–2024 European Central Bank discourse acknowledged firm pricing as a primary causal account. The U.S. mainstream discourse has not yet absorbed either lineage.
Who gets blamed when prices rise is not, in the United States, a question with a single empirical answer. It is a question whose answer is produced by the institutional architecture of U.S. economic discourse, in ways that have systematically protected the firms with pricing power and the asset-holders whose wealth appreciates during inflationary episodes, while disciplining the workers and consumers whose behavior the framework identifies as the cause. The pattern has held for eight decades. It is not held in place by economic necessity. It is held in place by institutional choice.
Infinite Economics covers the political economy of inflation attribution, the institutional architecture of U.S. economic discourse, and the structural responses to pricing power that the dominant attribution pattern forecloses. This piece is part of our ongoing investigation of inflation, market concentration, and the public-economy alternatives to demand-side discipline.
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