I don’t know whether or not your experience of late mirrors mine, but I find this economy to be very strange. I studied the discipline of Economics in college and graduate school, and prior to a couple of years ago, I would have claimed to understand basic macro-economic principles. But from the moment I heard that we were in a pandemic a few years ago, I have witnessed the strangest economy in several respects.
The Roaring Twenties
Groceries have increased in cost to a level that was unthinkable two years ago. Supply chain disruptions have resulted in shortages and long wait times for furniture, appliances, construction materials, and other capital goods. Employment is strange in that companies can’t find employees who are willing to work. And yet it appears that people are still spending money like we’re in the roaring twenties – the other roaring twenties a century ago.
Automobile and Housing Industries
In this episode, I discuss the automobile and housing industries in particular. Car dealers are charging price “bumps” that take the actual price higher, much higher in some cases, than the manufacturer’s suggested retail price. The same is happening in housing. Realtors are listing homes on Thursday, and by the end of the weekend, they are announcing a request for highest and best offers. These offers are often above asking price – sometimes thousands of dollars higher. How can demand possibly be so high? Did the pandemic change us? What about the national debt? Isn’t this bad for the economy?
We are technically in a recession, but people are paying over asking price for houses and cars. How is this possible? What does this say about capitalism? Does this say something horrible about our morality, or is this just the way the world works?
My students enjoy my rants on the economy from time to time. I hope you enjoy this timely episode of Relentless Truth.
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