opinion | We live in a new age of scarcity. It fuels economic anxiety as much as inflation.
Availability of products, or lack thereof, is a very important issue as high prices. The last time Americans experienced this phenomenon was in the 1970s, with long lines at gas stations. Today, more than two years after the pandemic, generations of Americans of all income levels are facing shortages in a wide range of products. It is, in many ways, a new age of rarity.
Four hidden reasons why food prices are crazy right now
Look at the housing market. There are a few homes for sale. Real estate stocks are at record lows. The newly opened open house of an 1,800-square-foot townhouse in Alexandria, just outside the capital, has attracted over 100 people. It was a final unit backed up by the trees, but the bathrooms, among other things, needed updating. In the end, 13 bids were made, and the property, listed for less than $500,000, sold for $580,000. Stories abound about ever-increasing home prices and prices, but as the real estate agent who sold that property told me, the main question is where the other 12 bidders will go, not to mention the 99 other people who have toured.
A record number of US cities have home listings over $1 million
The shortage extends far beyond housing. Many families feel they still can’t move on, even if they save hard during the pandemic lockdowns and get higher paying jobs or bonuses. Part of the reason is that they want to buy things – houses, cars, dishwashers – but often they just can’t, even at an exorbitant price. Car stocks are at record lows, so people are paying more than the sticker price, but the color or model they want isn’t always available. Likewise, grocery stores and restaurants struggle to keep items in stock. Before the pandemic, the share of items not available on store shelves was about 5 percent. Hardly most customers notice. Lately, it’s been closer to 12 to 15 percent, and sometimes worse.
“In many cases, Americans feel that someone else got there first. Someone with more money,” said Peter Atwater, president of Financial Insyghts.
Americans aren’t used to this kind of scarcity, which compounds the frustration that politicians have been feeling for most of the past year saying that supply chains will be repaired “soon.” Instead, problems keep popping up: as varied as a shortage of infant formula, Russia’s war in Ukraine has caused a food supply crisis, and China’s COVID-19 lockdown has closed factories and delayed shipments. It is now taking manufacturers an unprecedented 100 days, on average, to obtain the material — the longest delay ever since the industry began tracking it in the late 1980s.
Manufacturers have less than five days of supply of some computer chips
Some blame the media for the melancholy of Americans, arguing that reporters Focus a lot on the negatives such as high prices and the latest crisis in the stock market. But reporters have covered the strong job news extensively, including the fact that this job recovery is so Much faster than after recessions in 1990, 2001, and 2007. However, until supplies return to normal levels, Americans are unlikely to feel much better.
Meanwhile, Americans were primed to focus on the negatives. The past two years have seen tremendous chronic stress, as communities fear the coronavirus and have to contend with ever-changing advice for workplaces, schools and even family gatherings. Psychologists say that this kind of constant stress makes people more likely to focus on negative news.
“Once we believe the economy is in poor shape, the information we tend to look for and the evidence we remember reinforce that belief,” said Anne de Prince, a professor of psychology at the University of Denver. “It reinforces the view that we have no control.”
Much of everyday life remains out of control. Mind you: Americans have been told that vaccinations will largely bring the epidemic under control. Then, Last summer, a delta wave hit. Then came the failed US withdrawal from Afghanistan. Then Omicron. And now the war in Ukraine is spreading, as well as another form. Challenges abound to reopen schools and childcare facilities. There are no vaccines yet for children under five, and returning to offices is still a mess.
As long as the drama continues to unfold, people will continue to feel a loss of control over their lives and their choices.
What can the White House do? President Biden can’t magically get dishwashers back into stock or create too many homes for sale. But the president can focus again on supply problems and talk more frequently about what his team is doing to address them in the short and long term, as he did during the holiday shopping season. The release of oil from the Strategic Petroleum Reserve was a good start this spring. Ensuring that major West Coast ports are not closed this summer when union contract negotiations take place will also be key.
There is good economic news, but until Americans can easily get what they want, many will still feel unable to move forward.