This is a pretty good discussion of the relationship between supply chains and inflation, but one important thing he is leaving out is the relationship between unstable supply chains and pandemic lockdowns. The core issue is forecasting. When there is a major economic downturn (as there was during the onset of the pandemic and related lockdowns) followed by unpredictability and instability (e.g. the ongoing series of lockdowns and the periodic upswings in the pandemic), forecasters are hesitant to manufacture, deliver, or request extensive inventories because of concerns about potential market constrictions in the near future. No one wants to produce or purchase goods that won’t be consumed or resold, and which will depreciate or expire. This hesitance on the part of forecasters will produce shortages if there is a surge in consumer demand (particularly if the threat of more market constrictions are present) resulting in shortages and, consequently, inflation. The “Health Uber Alles” therapeutic crowd likes to pretend there are no costs to their favored policies.
Saagar provides a break down of the supply chain issues across the globe causing major food inflation in America as opposed to the convenient explanations being given for who to blame
Categories: Economics/Class Relations