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Illustration: Annelise Capossela/Axios

Inflation isn't always and necessarily a bad thing. It's one of many variables in the economy, and its presence helps some groups of people and harms others. But that kind of nuance is getting lost in the present debate.

Why it matters: There are two well-defined inflation camps at this point. Both of them take for granted that inflation is, broadly speaking, a bad thing. But that's never true for everyone, and always depends on how you define it.

Where it stands: The messaging from the Fed and the Biden administration is clear. Consumer price inflation has been low — too low, and in fact — for many years. As we recover from the pandemic, it might be high for a while. But that's likely to be temporary, and nothing to worry about.

  • Inflation hawks, led by Larry Summers, disagree and warn it could accelerate beyond control. Invariably they conjure up images of the 1970s.

The big picture: Recent decades have seen a lot of the kind of inflation that's good at entrenching the upper-middle class. Asset-price inflation — a roaring stock market and housing market — has made the rich richer, while leaving much of the country behind. Rampant inflation in college tuition and health care costs has similarly privileged the few who can easily afford such things.

  • Wage inflation is disliked by corporations, but loved by workers.
  • Those big trends are left out of the consumer price index (CPI), which concentrates on smaller and arguably less important things, like the price of jewelry, or postage, or "sauces and gravies".

Be smart: The rate of increase of the CPI is definitely important. Inflation tends to help borrowers and hurt savers, for instance. As economic historian Rebecca Spang says in the Washington Post, it is generally welcomed by people who consider themselves to be producers, while being feared by those who think of themselves as consumers.

  • As Bloomberg's Joe Weisenthal points out, "inflation" is often used to mean a broad intuition that people "have to work longer, in more tenuous conditions, for a middle-class standard of living" — which is something much bigger than just price increases.

Context: Precisely because inflation happened so long ago, it has become much scarier than it probably should be.

  • If inflation is driven by wage hikes for people earning less than $60,000 per year, it's not even clear that it would be a net negative for the U.S.

Flashback: The 1970s were half a century ago, a world of oil crises and the Vietnam war and a truly astonishing number of aircraft hijackings. China was still decades away from disrupting the international labor market, and the internet was still mostly just a U.S. defense project.

The bottom line: Inflation wasn't the main reason why people disliked the 1970s. If the 2020s do see inflation, then the 1970s won't be the result.

Go deeper

Biden White House jammed on gas prices

Illustration: Sarah Grillo/Axios

The Biden White House increasingly views rising gasoline prices as a source of potential political peril — and is now asking some of the world's biggest oil producers to pump more oil.

Why it matters: This trend, combined with a fragile economic recovery threatened by the Delta variant of the coronavirus, and inflation beginning to bite consumers, could threaten the administration's ambitious congressional agenda for late summer and early fall.

Updated 34 mins ago - Politics & Policy

Giuliani associate Lev Parnas convicted of campaign finance crimes

Lev Parnas, a former associate of then-President Donald Trump’s personal lawyer Rudy Giuliani. Photo: Stefani Reynolds/Bloomberg via Getty Images

Florida businessman Lev Parnas was convicted Friday on charges of conspiracy to make foreign contributions to political campaigns, according to multiple outlets.

Why it matters: Prosecutors said Parnas, then an associate of former President Donald Trump's personal lawyer Rudy Giuliani, funneled over $150,000 from a Russian businessman into U.S. campaigns as part of an effort to land licenses in the U.S.'s legal cannabis industry.

Supreme Court agrees to hear challenges to Texas abortion law

Photo: Saul Loeb/AFP via Getty Images

The Supreme Court on Friday agreed to hear two cases challenging Texas' abortion law, which bans the procedure as soon as six weeks into pregnancy, but left the law in place in the meantime.

Why it matters: The court is moving extraordinarily fast on the Texas cases, compressing into just a few days a process that normally takes months. And that schedule means the court will take up Texas' ban a month before it hears another major abortion case — a challenge to Mississippi's own 2018 ban on abortions after 15 weeks.