I’m pretty good about getting my kids’ food orders right, but once I almost forgot to get my son’s preferred sauce at McDonald’s, and I haven’t heard the end of it since. “Make sure they packed the Sweet ‘N Sour,” he reminds me every time we’re waiting in the drive-through. 

Yes, this kind of near disaster may feel trivial, but it illustrates a bigger point: people have a tendency to assign blame regardless of whether the worst-case scenario plays out. This week, Kellogg’s Neal J. Roese looks at how leaders often take the heat even for problems that never actually happened.

Plus, we consider how we might prepare for potential stagflation.

When disaster (almost) strikes

Close calls can bring out bad feelings.

A soccer team may give up a goal that gets overturned on review. Or tensions between two countries may reach the brink of violence before being negotiated back at the eleventh hour. 

The results ultimately aren’t so bad, but people may still want to assign blame for narrowly avoided disasters. People may hold the soccer coach responsible for the team almost losing the match or lose trust in the president who risked an economic crisis or war. Social psychologists refer to these what-if scenarios as “counterfactual catastrophes.” 

Roese, a professor of marketing, and his coauthors explored some of the factors that make people more likely to blame political leaders for their near misses in a recent study.

They found that people were more likely to blame leaders for counterfactual catastrophes that they thought almost happened than for catastrophes that they did not think came close to occurring. 

What’s more, people in the U.S. more readily blamed counterfactual catastrophes on presidents of the opposing political party. For instance, Democrats were more inclined to blame President Trump than they were to blame President Biden for an imaginary nuclear attack, and vice versa.  

“Our research shows that thinking about bad things that did not happen, yet nevertheless could have happened, is a powerful input into moral reasoning,” Roese says. 

Read more in Kellogg Insight.

The spectre of stagflation

The potential disaster on many economists’ minds at the moment is stagflation. This ugly combination of inflation and recession maximizes the pain for consumers and businesses while also leaving policymakers without their usual levers for steering the economy.

In 2022, Kellogg’s Phillip Braun downplayed the risk of stagflation, but four years later, he’s far more concerned. After fears of stagflation following COVID shutdowns abated, they have come roaring back in the wake of military actions in Iran and across the Middle East. Americans are facing oil-price shocks, rising prices, and the fear of a slowing economy. 

“Today’s environment is more like the 1970s than four years ago,” Braun says. “The environment is ripe for stagflation with this oil-price shock.” 

To assess the risk, Braun is primarily watching two factors: whether oil prices stay elevated for an extended period and how the Fed responds. With the end this week of Jerome Powell’s term as Federal Reserve chair, the future of U.S. monetary policy is uncertain. 

“We expect the new chairman of the Federal Reserve to be more accommodative to the demands of the Trump administration,” Braun says. “And in these circumstances, it would be pushing interest rates down in a situation where we don’t want to do that because it will push us into stagflation. So that is problematic.”  

Should stagflation hit the United States, there’s not much most of us can do except batten down the hatches. “Don’t let your tank run too dry, and be conservative in your budget going forward for a few years,” Braun says. 

Read more in Kellogg Insight.