COVID-19 in America: Economy and Supply Chain

The COVID-19 pandemic has been an exercise in exposing every weak point in American society, not to mention figuring out what is the least bad option. From American health care and education to American politics, every system in this country is in dire need of improvement and upgrades.

But today, let’s look at the American supply chain and economy.

What Is a Supply Chain?

To put it simply, a supply chain is the series of steps of making a product or service available in the required quantity to the consumer. These supply chains are quite complex. Think of these supply chains like an ecosystem. One seemingly minor disruption can cause massive problems.

Effects of COVID-19 on Supply Chains

In early 2020, when the pandemic was first hitting the United States and hospitals became overwhelmed, multiple supply chains started to break.

Hospitals could not get necessary personal protective equipment because demand was so high. A combination of incompetence and malice from the Trump administration when it came to handling PPE made what would have been a grave situation into a catastrophe that nearly caused the health-care system to collapse. It did this via playing politics on which states would get badly needed supplies based on how well Trump liked that state’s governor. The Trump administration was so useless (at best) that at one point, quite a few states in the western United States, the Northeast, and around the Great Lakes formed compacts on how to contain the virus, utilize supplies, and safely reopen the economy.

In addition, panic buying of items like toilet paper and bottled water caused these essential goods to disappear from multiple locations. Panic buying got so bad that some stores had to limit how much meat customers could buy so they could stay in stock.

Other Effects

Even before shutdown orders, businesses such as restaurants were already seeing their profits nose-dive because no one felt safe going out anymore. The stock market took a serious plunge as the bad news came in. Many businesses and even entire sectors have not recovered from the devastation COVID-19 caused.

Close to one million people have died in the United States, and a bunch of other people took the pandemic as their cue to retire or quit; consequently, many sectors are seeing serious labor shortages.

In addition, serious weaknesses have been exposed in the American economy. American supply chains are amazingly efficient, but they depend on many things going well at once. Put another way, a minor disruption in a supply chain can cause major problems—which leads nicely to my next point.

Inflation

The United States is experiencing inflation, and the main reason is quite elementary.

When people began to feel comfortable spending money again, the supply chain still needed to be rebuilt.

As a result, people had more money to spend than there was supply.

When demand outpaces supply, prices are bound to increase.

This is what happened at the end of World War II, for example, when the United States transferred from a wartime economic footing to a peacetime economy.

Fortunately, inflation is starting to get better as the various supply chains recover. Unfortunately, there is not much the president can directly do about the prices of various goods.

Take gasoline, for example. Because the demand for gasoline crashed overnight and then went back up without the supply chain being fixed completely, the price of gas has experienced a significant hike. The same story applies to various food goods and rental cars.

The stimulus helped keep people in their homes, their homes powered, and food on the table. Even if it caused a surplus of money to come into circulation, that stimulus kept a bad situation from getting worse. Painful as it may be, inflation was the less bad option than another humanitarian crisis piled on top of COVID-19.

What Can Be Done

A few things can be done.

President Biden has worked overtime to alleviate inflation by helping to clear backlogs at various ports to assist in getting goods to their places on time. Thanks to this, Christmas was saved.

But more needs to be done.

To help ease the labor shortage, President Biden and Democrats should encourage a lot more immigration, even of so-called unskilled labor. Help Americans retrain for various sectors that need people, such as health care. At this point, I don’t think more stimulus is necessary. The American economy is already showing signs of getting back into full gear, not to mention the impressive jobs numbers of the Biden administration.

The food industry is having labor shortages too.

In addition, I would like to see the Trump-era trade wars ended with our allies and tariffs eased on goods coming across the border.

When it comes to China, however, I would advise being more careful. The Chinese Communist Party has proven about as trustworthy as Trump himself.

The economy will recover, but it is important to know how.