Just how bad is it going to get?

Everyone has a story by now, of how the shortages are affecting them. Is this temporary? When will it get better? How do we manage in these times? 

Empty shelves are not a bug, but a feature of the new economy.

Highlights

By Marshall Connolly (NEWS CONSORTIUM)
10/19/2021 (3 years ago)

Published in Business & Economics

Keywords: economy, scarcity, COVID, changes, business, supplies, shortages, pandemic, depression

LOS ANGELES, CA (California Network) - Yesterday, we had to put my wife's car, a Subaru SUV into the shop. While walking the lot, I asked an affable salesman, "Where are your cars?" He replied, "We only have four new ones on the lot." At the store, I noticed the ice cream shelves were almost barren. In other places, the stock was low. Nothing to be alarmed about, but it's clearly a sign of things to come. On a recent trip to Huntington Beach, I counted 24 container ships lined up, waiting to offload their cargo. And in today's news, that number now exceeds one hundred. 

There are a lot of theories. COVID seems to be at the root, along with shutdowns in key sectors around the globe, such as coal mines in Asia that are closed, forcing powerplants offline. Computer chip manufacturers are suffering difficulties of all kinds. One factory caught fire, another is suffering for a lack of water required for the manufacturing process. A third factory was shut down because of snow. And there aren't too many others to serve demand. 

Fuel prices are approaching an all-time high, making it hard to move goods that are produced. Hoarding and spoiling are accounting for many other products. Not only are shelves barren, but workers aren't working. Millions are quitting, and thousands are on strike. Central banks are printing money to keep the economy afloat, but inflation is roaring back while economic activity is in decline, a situation called "stagflation." 

There are also dire predications that the system, that is global capitalism, has simply gone too far and it is breaking down as the consequences set in for scarcity, climate change, and mass extinction. And there are of course, plenty of accusations that all this is political brinksmanship as nations vie to come out on top during the recovery. 

Will there even be a recovery?

History tells us two things. First, pandemics are far more disruptive than people think. A pandemic usually lasts until it burns through an entire population. Right now, COVID has infected just 5 percent, so it has 95 percent of humanity to go. Quarantines and shutdowns or not, they destroy global networks as people become ill and sometimes die. Many become too fearful to transact. Uncertainty discourages spending. Workers, realizing their labor under hazardous conditions is now more valuable, strike for higher wages. This isn't a new phenomenon. It's typically observed in the wake of pandemic diseases. It was observed following the Black Death (1347-1354). There's nothing new under the sun. Second, the political and economic consequences of such events are long-term, often spanning decades. 

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The bottom line is, the world is not returning to 2019. Nor are these times likely to get "better" anytime soon. Even predictions that things will "go back to normal" in 2023 are excessively optimistic. 

Life for many people will go on of course, but it is going to change in a number of ways. Shortages mean rationing. They mean repairing or making do with what you have rather than buying new. Used things will not be discarded, now they will be hoarded and sold. Prices will rise, and people will have to make hard choices. 

The 2020s are starting to look a lot like the 1930s. People will endure mass unemployment, a lack of resources and materials, poor wages, and hunger. 

The strangest things will be in short supply. Ice cream was one item I did not expect to see disappear. It could be a local or temporary phenomenon. And when one item is integral to many others, for example, computer chips, we can expect a ripple effect on the economy. That's what's behind the lack of cars on the lot. Good luck buying a computer at a reasonable price.  

We are all about to learn a hard lesson in frugality. We will learn to save and fix what we might have otherwise thrown away. We will learn how to share, to pass along, to cooperate, and to trade. 

In the meantime, networking with neighbors, planting a garden, learning to spend more time with family and less dining out are the old joys waiting to be rediscovered. An apocalypse is upon us. But apocalypse doesn't mean an end. It means, "beginning." And as the old passes away, the new arrives, and I think we will be okay. There's joy in simplicity. It's time to rediscover that.