Yes, Our Economic Problems Are 'High Class'
Here's how TV news works: What is just an annoyance becomes a concern. A concern turns into a serious worry. And a serious worry is elevated into a crisis. Stoking anxiety is how they keep the public glued.
White House Chief of Staff Ron Klain recently got sucked into the cyclone when he approved of a tweet that called most of our current economic challenges "high class problems." The view that some positive developments lay behind current inflation and supply-chain woes mutated into cause for outrage. Pundits on both CNN and Fox News pummeled Klain for alleged insensitivity to consumer suffering.
How dare he imply that Pink Chick dolls possibly not getting from Chinese factories to American homes in time for Christmas was less than a threat to the American way? And have you noted that that despite a recent spike in gasoline prices, the roads don't look especially empty?
Klain was quoting Harvard economist Jason Furman, who said: "Most of the economic problems we're facing (inflation, supply chains, etc.) are high class problems. We wouldn't have had them if the unemployment rate was still 10 percent. We would instead have had a much worse problem."
True, gasoline prices have risen sharply to $3.19 a gallon, but that's largely because they collapsed sharply a year ago in the throes of the COVID-19 pandemic. As fears of contagion closed offices and emptied stores and restaurants, the price of gas fell to about $1.94 a gallon.
Some of the gears needed to crank back energy supply did get rusty, but higher prices for the product are sure to unrust them. For perspective, gas prices were higher in 2014, a whole seven years ago. Nobody starved.
We're seeing backups at the ports because Americans are feeling flush and buying lots of stuff that gets shipped from Asia. We're hearing about a labor shortage because businesses have beefed up their hiring. The competition for workers has led to a jump in pay for a group that has endured wage stagnation for decades. Is this a terrible thing? That would depend on what you do for a living.
Some have been blaming the tie-ups at ports on a lack of truck drivers. Todd Spencer, a trucking industry expert, says he's been hearing about the driver shortage for years. "What drivers all over the country tell us is that they can't get loaded or unloaded." They face long wait times on both ends of the trip — often many hours for which they don't get paid. Perhaps it's time to remunerate them for sticking around.
The bottlenecks will eventually clear up, and cheap plastic garlic graters from Asia will again flow like Niagara Falls to American retailers. But this offers a great opportunity to bring back manufacturing — to make more of our stuff in this country or at least next door in Mexico.
Semiconductors, the little brains that run appliances, computers and cars, are in short supply. The scandal is that nearly all the world's computer chips are made in Taiwan (or mainland China), rather than here. This sounds like an added incentive to current efforts to build up a domestic semiconductor industry.
Domino's Pizza just reported its first decline in same-store sales and blamed a shortage of delivery drivers. If we had to pick up our pizzas for a while, would the world come to an end? (I've done it!)
This is not to dismiss the challenges facing retailers and other businesses that relied on inexpensive labor and well-oiled supply chains. But how many tears must be shed for cyclists who have to wait a while for their $1,200 bikes? As problems go, that's pretty "high class," don't you think?
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