Coronavirus / Economic Developments / Government Watch / Instagram

Biden Economy Plagued By Shortages, Price Hikes

AMAC Exclusive

Economy

After the specter of COVID loomed over the holidays last year, Americans are eager for a normal holiday season, but last week, their hopes were dashed yet again. According to the Wall Street Journal, Christmas trees and other seasonal items might be difficult to find and more costly to buy this December. But decorations aren’t the only thing that may be missing from the festivities. In recent months many Americans have been left wondering why, under the Biden economy, even basic necessities seem pricier and harder to find than ever.

While early pandemic supply shortages were mainly due to panicked shoppers and the hoarding of common goods, almost all products have subsequently been hit by significant supply disruptions, from furniture to used cars. In many ways, the shortages have less to do with a massive supply disruption and more a “perfect storm” of many smaller supply disruptions. While economists are still puzzled about how to solve the shortages, the three most common reasons cited for them are overreliance on international supply chains, shifting demand, and uncertainty over the longevity of the pandemic.

An example from recent history may shed some light on how overreliance on offshore supply chains has led to the current predicament. In 2018, American wellness centers and hospitals were shocked to find a 600% markup on saline I.V. bags, an essential product in the medical industry. The reason for this major increase? Forty-three percent of I.V. bags are made in Puerto Rico. The island had been decimated by Hurricane Maria, and production of the essential medical devices came to a screeching halt for weeks.

This reliance on international shipping for medical products doesn’t simply end at I.V. bags. Eighty percent of all pharmaceuticals are produced overseas, mainly in China and India. In 2018, more than 20 percent of all goods imported to the United States came from one country, China. Many of these imports came directly from Wuhan, China, the site of one of the largest shipping centers in the country. These international supply chains are so reliant on efficiency and optimization that, when one container ship, the Ever Given, ran aground in the Suez Canal, it delayed an additional $9.6 billion in goods from reaching their destination for every day it was stuck. The ship was finally freed after 106 days.

This overreliance on trade with China has massively exacerbated the international economic damage of COVID-19. To address this imbalance, many countries are actively incentivizing companies to relocate closer to home. Most notably, Japan is spending $2 billion of its stimulus package to encourage companies to move production back to Japan. Returning manufacturing to America was a cornerstone of former President Trump’s economic policy. However, despite calls for Biden to shift essential manufacturing, like pharmaceuticals, back to America, the new administration has taken little action to do so.

The second major cause of shortages cited by economists is shifting demands. This is most plainly seen in the massive lumber shortages earlier this summer. While it may seem a distant memory to many Americans, the pre-pandemic economy was one of the best the country had seen in almost 50 years. Most notably, wages had seen some of the largest increases in recent history. Only months after most stay-at-home orders were issued, the average personal savings rate jumped up to 33%. By 2021, Americans had amassed a record $15 trillion in total savings.

Most Americans were trapped at home, and those who weren’t had few places to go. With this greater emphasis placed on domestic life, demand for homes and home improvement skyrocketed. The lumber industry, still hobbled from supply shortages along with closed logging centers due to COVID, was caught entirely flat-footed by the demand and is still struggling to fill orders. Even as Americans eye an end to the pandemic, many do not wish to return to the office. According to one poll, a record 31% of workers wish to work from home permanently.

But perhaps the biggest culprit of current shortages and price increases is Joe Biden and his administration’s response to the pandemic. When President Joe Biden took office, the summer of 2020 was predicted to be the summer in which the American economy would roar back to life. Two hundred and seventy million COVID-19 vaccines, developed under the Trump administration, had already been administered by May. Restless Americans, with record savings rates, would revive the economy with a wave of spending. The businesses that had survived the pandemic were ready to rehire employees and open their doors once again. Social media influencers had already dubbed the months to come “Hot Vax Summer.”

But that is not what happened. Despite some early progress, economic growth slowed significantly. The Delta variant caught the global community by surprise and shops closed their doors once again. At the same time, Democrats’ insistence on a lengthy extension of historically generous unemployment benefits, understandable at the peak of the pandemic-induced economic crisis, substantially slowed the recovery as businesses were unable to induce employees to return to work.

This gigantic degree of government spending is also a popular explanation for the notably high inflation that even the Federal Reserve has identified as a drag on the economy.

The woefully inconsistent messaging emanating from the White House did nothing to help. Many Americans are asking themselves whether this permanent pandemic is the “new normal?” That question is at the heart of why so many businesses are hesitant to increase production to meet demands and why so many individuals are hesitant to participate in the economy.

If a wave of COVID variants every few seasons will now be the norm, businesses can resume production at full capacity while taking reasonable precautions. If this is still a pandemic, then they are incentivized to keep production, and production costs, low to ensure they have the liquidity to survive another economic downturn. The same choices apply to individuals. Many Americans still have the memory of mass layoffs, delayed weddings, and businesses collapsing in the early days of the pandemic. They may be hesitant to book a vacation, make a major purchase, or reschedule major events delayed by the pandemic until they are assured that the economy won’t grind to a halt once again.

Now, as Americans brace and stock up for what the farmer’s almanac predicts to be the coldest winter in years, Americans are still hard pressed to find even the basic necessities. Until the federal government effectively, and honestly, conveys what the expectations are for American citizens, the situation is unlikely to improve. “Hot Vax Summer” may have been a myth, but rest assured, “Cold, Expensive Winter” will very much be a reality.

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Rick
24 days ago

Sounds like a government run by Hugo Chavez.

gerald serlin
25 days ago

Surely it is evident that when more people want things that are in short supply, the prices for those items go up. That is the nature of a free economy. In a truly free economy, this problem is self-correcting. However, modern society and the pols running it do not permit self-correction and instead imposes governmental correction, which keeps things out of whack for much longer and leads to more government control over the people, instead of people controlling the government.

Hal
1 month ago

Sadly, the worst is yet to come in an economy and Constitutional law environment as manipulated by Joe Hidin’ Biden and his DemocRat political ilk. Fix the voting system or this will continue for many, many years.

Wanda
1 month ago

The ships that are waiting to unload need to start moving to the Panama Canal and come to the port of Houston…unlike the communist state of imbecilic moronic brain dead, Texas can unload and ship out the products and probably be closer to the warehouses where the truckers need to go. Food prices are going through the roof….yesterday, the precooked bacon that I purchase used to be $12.79….yesterday it was $17.99…..$5.00 a package more and you can expect other increases in everything. The illegal cheating president needs to go along with Harris, Pelosi and Schumer. He did not win this election….he was installed by Big Corporations, voter fraud, voting machines switching ballots and the fake news medias….who are a clear and present danger to America. If things continue the way they are going, I look for violence to break out and it won’t be in the super markets….Jan 6 will look like a picnic when it does….it is just a matter of time before the volcano explodes.

Verl Herriman
1 month ago

Get that dimwit out of office all of them they don’t have a clue what’s good for the country anyone that would open up the country to anyone is not in his or her right mindd

Verl Herriman
1 month ago

Kick Biden out of office and everything would get back to normal put his VP out and Nancy they are the reason everything is not good for the people they work for the people we don’t work for them to much is goin g out and for what ?

james michalicek
1 month ago

Don’t worry Joe. AMAC won’t bother you, no matter how worthless a president you are. They never seem to do anything!

Marilyn
1 month ago

WHY AREN’T PEOPLE PUTTING AN END TO THIS WHITE HOUSE !!!!!!!!!
This administration lies, cheats, the Bidens are criminals and should be in jail, along with most of the White House staff. They are all traitors to Beautiful America and and to the citizens of America.
These horrible people are doing the Devil’s hateful bidding. They belong in HELL!

JJ Johnson-Smith
1 month ago

Coldest Winter in YEARS. Must be Global Warming. If the Biden admin. hadn’t kept extending Unemployment Benefits that were far higher than the average paycheck, people would have gone back to work MONTHS ago and the economy would be doing fine!

Paul
1 month ago

This Amazes me!Those of you.who voted this Ass into office,should have know that he’s out for himself.That’s not Presidential leadership.That’s the sign of a Con Man.

Sean Richman
1 month ago

Ditch biden,harris,pelosi,schumer,china and don’t stop there.Bring President Trump and jobs and prosperity back to AMERICA.

SGMLevi
1 month ago

biden is a plague on the usa.

Don Brinks
1 month ago

Those in power do not want any of us to be independent in any way. That would look too much like what Trump accomplished. And people would recognize it. So that just doesn’t work for the communists occupying the seats of power.

D.P.
1 month ago

Yet another indication that our self-reliance is more important than ever. While we are part of an international economy, we should never allow the essentials to be so bound to outside sources. None of the items mentioned in this article are non-produceable in this nation. But as long as profits remain the primary target of businesses, above national security, we will never be free of the threat. This is not news. It is the repeated history of our own short-sided perspective. Even the simple band-aid is not available from but a few American companies. Look at the labels of the vitamins, medicines, food stuffs and fundamental necessities…..Made in U.S.A. is all but absent. We are our own worst enemy in this ……as long as money is the fuel, and greed the motivation, outside interests will take us down by simply withholding goods. We have lost control of our own destiny…having handed it over to other entities, many of whom are our overt enemies.

Tmac
1 month ago
Reply to  D.P.

 But as long as profits remain the primary target of businesses, …”
Without those profits the businesses go under then not only is there no product there is more unemployment. A much larger part of the problem is peoples constant demand for cheaper prices without giving any thought to where the item is made.

D.P.
1 month ago
Reply to  Tmac

Point taken….however, job loss is already in progress as U.S. businesses continue
to transfer production over seas. Lost jobs may be a short term issue in the transition to American made, but that would recover over time…as it stands, we only lose on all fronts. Jobs. Economic dependency. Loss of freedom. No worth while change is easy. We cannot afford to continue down this path of global connections that hurt across the board.

PaulE
1 month ago
Reply to  D.P.

Both Tmac and D.P. are correct and have valid points. What is missing in the discussion is the need to formulate a balance that both ensures national security concerns, which are crucial to the country’s long-term viability, and the need to make the United States more competitive as a high-end manufacturing hub. Yes, some goods will increase in price with certain items made in the USA, but that is a small trade-off to ensure national security concerns are met. We currently buy all the propeller blades for our naval ships from China as an example, because we no longer have a manufacturer here that can do the work. Does that make sense to anyone, given the fact that our greatest national security risk is from China. There are literally dozens of other examples equally absurd.

We will never compete with the slave level wages that China pays most of the people in its factories, so they will likely retain the low margin manufacturing sector of the market. We can automate more of the manufacturing processes here, which should narrow the price differential but we will never be the lowest cost manufacturer. The American people should be adult enough to understand that.

However, when it comes to higher end goods, we can certainly compete with China when you factor in the cost and delay times of making those goods in China and then having to sail them to the United States on large container ships (4 to 6 weeks) or fly them in from China. Those are not insignificant costs that have to added into the price of those items.

All this requires something we currently don’t have in Washington. That is a grown up who understands the complexity of international business and has an appreciation for national security concerns. We used to have that until 8 months ago, but he was ousted to put a puppet in his place. With the incompetent puppet we currently have in place, he is working diligently to make the United States even less competitive on the international stage by raising taxes, increasing regulations and encouraging businesses to move their operations overseas. All of which would chiefly benefit China.

Last edited 1 month ago by PaulE
elysummers
1 month ago
Reply to  D.P.

We tried in the 80’s to reject foreign cars, Buy American we said. Well the dems figured out how to circumvent that and had parts produced in foreign countries that were necessary to build “american” cars. That was but the beginning of the down hill spiral of the truly American economy. It wasn’t perfect before but this incident was like flushing the toilet.

Elena
22 days ago
Reply to  D.P.

3 major sins … lust of the flesh, lust of the eyes, and the pride of life. Control, greed, and power. They that have sold their soul, will never have enough. They will never be satisfied. Like a giant beast shoving handfuls of America and her people into its mouth … it just poops it out into its coffers … and keeps building bigger barns to hold it.

Lee S McQuillen
20 days ago
Reply to  D.P.

What’s wrong with second hand items to fill needs? Yard sales, Good Will stores, individual second hand stores – all would be a help in that regard. Don’t pitch things you don’t want if there’s still use in them. Pass them on in some manner. Sure they might be made in China but they won’t be made a second time as the first will move along to someone else. Take care of your things and they last longer. That would at least cut down on what we get from China.

Techvet6769
1 month ago

This whole of Shortage is planned

KAJ
1 month ago

Make our products in the USA and solve the problem.

Sharon Ormsby
1 month ago
Reply to  KAJ

All of our factories have been shut down and buildings sold and made into other things. It would be nice though wouldn’t it? It’s not like we weren’t warned a LONG time ago.

NAMVET72
1 month ago

THIS IS JUST ABOUT LIKE THE OLD SOVIET UNION LIKE WE READ ABOUT IN THE 60s and 70s!

Kyle Buy you some guns,and learn how to shoot
1 month ago

The answer is to produce our own goods. They would cost more,but it could be worked out. Go back to being indepedent like years ago. Kyle L.

michael j murphy
1 month ago

WATCH THE VIRGINIA”S GOVENORS RACE.THE DEMOCRATS WILL AGAIN USE ENORMOUS FRAUD TO WIN THIS, AND MANY OTHER ELECTIONS.

michael j murphy
1 month ago

THIS IS WHAT HAPPENS WHEN YOU LET MASSIVE VOTER FRAUD PREVAIL !!!!

Hal
1 month ago

Yep, our system of Demoncrat Constitutional Governance cannot function as good governance without honest unrigged elections. Our Nation’s DPG MUST have unrigged honest elections or else it is simply defaults to a brand of Communism as pushed by the present DemocRat Party. I repeat … the DemoCrats want to RULE the Nation according the their best partisan interests … Informed American non-DemocRat citizens want the Nation to be GOVERNED according to a Democratic Consitutional governance.

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