Ever since the United States moved away from the Gold Standard in 1933, prices have been on a steady increase. But in the last ten years prices have had an exponential influx that had stunned the world, leaving the US with its greatest homeless population in decades but also creating mass amounts of wealth for the rich. The wealth inequality in the United States is incredibly wide, you have hundred billionaires who essentially rule the world living within miles of homeless people living on Skid Row. Why has this happened?
The US Dollar has had an average rate of inflation of 2.19% annually since 2000, this is caused in large part due to shortages in raw materials such as oil, minerals, and energy. But now, in 2022, we have seen an exponential increase in inflation and, thus, the wealth gap. This is caused by supply chain disruptions coupled with internal governmental issues. Covid brought the onset one of the largest unemployment stints in history of the world, shutting down virtually all businesses. The real issue though was manufacturing. Production in China was put to a screeching halt, disrupting supply chains from everything from cars to toys and everything in between. Not only did this make business and commerce nearly impossible for the US middle class but it caused prices of the resources that were available to skyrocket. Cars that were once selling at $20,000 are now retailing at $35,000. People cannot afford to purchase goods, let alone create a living for themselves. This is rooted in the issues caused by the pandemic, but the government has not helped much. Yes, they gave government benefits to unemployed citizens, but they did not aid in easing the process of commerce. In California there are billions of dollars worth of goods just sitting in our ports due to absurd government policies. One of the many policies that has halted commerce is the fact that delivery trucks cannot be older than 2019 in order to deliver California products from the ports. But due to Covid, newer cars have not been made due to the shortage of car microchips (which are sitting in the ports). This has led to a gridlock, causing the prices of virtually all consumer goods from other countries to rise by the day.
There are only two viable solutions to this issue: the first is to simply amend the policy. The second is to pivot, send the ships in the California ports to another states’ port so the goods can be offloaded and brought to consumers. Whilst this is just the tip of the iceberg of what can be done to decrease the current absurdity that is the prices in America, it is certainly one of the most prevalent.
It's not just the US- we're seeing this in the UK as well, in the onset of Brexit and the Russian war. Namely increased difficulties getting things in and out, leading to things just sitting outside the country or worse, unable to be exported. In a recent case, something like tons of beets rotted on a UK farm because they couldn't get transportation in order and it turned the soil of the surrounding towns purple. California is ramping up e-commerce and creating housing bubbles to stimulate the economy, but neither are sustainable and e-commerce is going to languish unless we get a proper transportation network in place.
The hold up at the ports is something that has really been confusing and frustrating me. There are so many policies that are so contradictory and make absolutely no sense. There really needs to be some change and attention brought to these issues. I feel as if the policy makers are just not paying attention to what is happening and this is how these backups happen.