Murray N. Rothbard, “Inflation and the Spin Doctors” (1990)

This file is a short single-author economic polemic: a compact chapter in Rothbard’s “Fiat Money Plague” sequence. Its immediate scope is the January 1990 cost-of-living report, but its larger target is the rhetoric by which officials and economists normalize inflation. The structure is direct: analogy to political “spin,” a reading of the 1990 price data, an attack on “core” inflation, historical examples of index manipulation, and a final Austrian diagnosis locating inflation in government money creation.

What we sometimes fail to realize is that the Establishment has its spin doctors in the economic realm as well.

Rothbard’s opening move is to make economic interpretation political. Price statistics do not arrive, in his telling, as neutral public knowledge; they are immediately surrounded by explanations designed to pacify. He contrasts older standards, when inflation above 2 percent was alarming, with a later tolerance in which 4 percent can be treated as near price stability so long as it avoids the psychological boundary of “double digit” inflation.

For every piece of bad economic news, there is a scramble to provide a pleasantly soothing interpretation.

The essay’s occasion is January 1990, when the cost-of-living index rose 1.1 percent in a month, an annualized rate above 13 percent. Rothbard stresses that this resembled the feared inflationary peaks of the 1970s, yet produced no panic. The reason, he argues, is that commentators immediately removed food and energy from the story, even though those were precisely the most painful and rapidly rising categories.

You see, if you take out the fastest rising price categories—food and energy—things don't look so bad.

This is the essay’s central statistical critique. Rothbard is not only saying that food and energy matter; he is arguing that the “core rate” turns measurement into reassurance by subtracting inconvenient evidence. Even after the subtraction, the January “core” figure annualized to 7.5 percent, but it looked less alarming because it fell below the symbolically dreaded double digits.

The concoction of the "core rate" is a plausible-seeming example of a racketeering general principle: if you want to make inflation go away, simply take out the price categories that are rising most rapidly.

Rothbard then generalizes the maneuver. During the Reagan years, he says, rising housing prices were excluded through a rental-equivalence rationale; in 1923 Germany, some economists could claim deflation by measuring prices against gold rather than the depreciating mark. These examples serve one conceptual purpose: inflation can be obscured by choosing an index remote from what consumers actually buy.

Find some excuse for taking out all the rising categories, call whatever is left the “base rate,” and presto-changeo! inflation is gone forever.

Against expert abstraction, Rothbard makes the consumer’s cash experience the empirical ground. People do not buy only the analytically purified remainder left after volatile goods are removed; they buy food, energy, housing, books, and brand-name goods whether or not these are convenient for official indices.

We consumers don’t have the privilege of paying only for “core” goods; nor, unfortunately, do we enjoy the luxury of paying in gold.

The conclusion turns from measurement to cause. Rothbard rejects wage-push explanations, noting that wages had lagged prices. His core thesis is monetary and anti-statist: inflation comes from government-created money entering the economy and bidding up prices.

The real culprit for the accelerating inflation is the one candidate that the establishment always tries its best to avoid fingering: the money supply created by the federal government itself.

The essay remains relevant because debates over headline versus core inflation, expert communication, and index construction continue to shape public understanding of prices. Rothbard’s final move is moral as well as economic: he equates fiat monetary power with counterfeiting and insists that inflation cannot disappear while government retains that power.