In my previous post, I mentioned the lingering medical aftereffects of COVID. If it’s true that a disease leaves an imprint in your body, well, the hyper-response to the pandemic – the near strangulation of all human interaction – left a deep impact on our current prospects. We are experiencing it as a huge economic funk.
Inflation is set to rear its ugly head. There’s no better way to bloat prices than to pound production into submission. The supply and demand curves will do the rest.
Biden’s government threatening the crap out of the productive sector with the machete of regulations and taxes from its lefty utopianism plays a huge role. But so has the pandemic-authoritarianism of Biden’s side of the aisle. Blue state mayors and governors can’t shake the erotic euphoria that they receive from telling everyone within the reach of their edicts how to live.
Plus, they took imbecilic actions to scare the bejeebers out of their law-abiding residents by treating riots and wanton thuggery as First Amendment expression. Thus, people fled in droves to safer environs which resulted in real estate pandemonium in places that don’t have the wherewithal to increase housing supply, thanks to the garroting of the aforementioned supply chain. Locals can’t afford a $300,000 shack.
Lockdowns wreaked havoc in the demand for certain elements in the supply chain. Take for instance the lumber industry, the makers of paper pulp. There’s less need for mundane things like office paper when offices are closed and everyone is struggling with Zoom in their pajamas, and plants begin to close. Almost everything downstream to the shelves of Walmart was negatively effected.
That third leg of the factors of production – labor – was amputated in industries our potentates labeled “non-essential”. Don’t tell me that a Happy Meal wasn’t affected. Don’t tell me that much of the cornucopia of the entire marketplace wasn’t affected.
Then, our grand viziers drummed up the idea that it wasn’t enough to smother most everyone behind filthy masks and a home computer screen. The geniuses came up with the moronic idea of paying people with magic money to not have to put up with the boss up close and personal, or go through life without one. Suddenly, it pays to stay at home with your Hot Pockets . . . if the supermarket doesn’t run out of them.
The whole gambit smashes supply – i.e., production – creates pent-up demand ready to burst, as it hoses down the country in magic money – an additional $6 trillion of it if Biden has his way . What’s there to worry about?
Welcome to another casualty of government-sponsored COVID-panic.
Yahoo has an excellent piece on the stratospheric jump in lumber prices. It’s an interview with Bob Bauer of the Kentucky Forest Industries Association. Check it out here.
RogerG