“In our federalized system, it may make more sense to blame your state and local government or even your neighbors, not President Biden, for out-of-control costs in housing and energy or supply chain pain in our logistics infrastructure. That’s because most of the time, the US tasks lower levels of government with responsibility for infrastructure and land use — and the decisions made at those levels in the past are contributing to rising prices today.
State and local jurisdictions, not the Fed or the feds, determine how much housing is built and where, when to permit cheap clean energy sources and vital energy transmission lines, and whether to expand ports and logistics infrastructure. Across the country, local legislators, executives, and public authorities have declined to spend more to improve economic capacity, or placed additional hurdles in the way of badly needed new development.”
“Tariffs aren’t merely making summer fun more expensive—they are also making it potentially more dangerous too.
“Life Saver is not a misnomer,” writes Neil Mooney, an attorney representing Life Saver Pool Fence Systems, Inc., in testimony submitted earlier this month to the U.S. International Trade Commission (USITC), which later this week will hold a hearing on the economic impact of the multitude of tariffs imposed by the Trump administration in 2018.
For a company like Life Saver, which manufactures fencing meant to keep children away from unsupervised pools where they might accidentally drown, the tariffs have hiked the cost of raw materials imported from China. In his written testimony, Mooney estimates that the company has paid about $1.2 million in tariffs over the past four years—and has twice had to raise prices “specifically because of the tariffs.”
“The imposition of the Section 301 tariffs has forced Life Saver to raise its prices which inevitably has led to lower sales volume and therefore fewer protected pools,” writes Mooney. “The economic impact of the Section 301 tariffs is not only felt by Life Saver and other similar businesses and their employees, but also by the end consumers—American families.”
Are higher taxes on Chinese-made imports worth leaving American children marginally less safe?
Apparently so, at least for the past two presidential administrations. Former President Donald Trump used Section 301 of the Trade Expansion Act of 1974 to impose tariffs on a wide range of goods imported from China in several phases during 2018 and 2019. As a result, the average tariff rate applied to goods from China effectively doubled. Cumulatively, Americans have paid about $136 billion in higher costs as a result of those import taxes—that’s about $1,000 per household, according to research by the National Taxpayers Union, a nonprofit that opposes the tariffs.
Tariffs are adding to inflation, too. A study by the Peterson Institute for International Economics, a trade-focused think tank, found that repealing tariffs could reduce overall inflation by about 1 percentage point. Despite that, the Biden administration has so far been unwilling to do more than talk about repealing the tariffs imposed by Trump.”
“Known as the Farm Workforce Modernization Act, the measure was sponsored by Reps. Zoe Lofgren (D–Calif.) and Dan Newhouse (R–Wash.) and passed the House twice last year. It aims to improve the immigration mechanics behind the U.S. agricultural workforce, expanding legal pathways available to foreign workers and the domestic farmers who hope to hire them.
The ability to hire more agricultural workers translates into more helping hands for farmers and increased production of goods, which then means fewer food shortages and lower prices at the grocery store.”
“In 1981, the US was in the midst of a second brutal stint of double-digit inflation in less than a decade. Gas prices were through the roof; mortgage rates were sky-high, keeping many middle-class people from being able to buy homes. The job market was weak, too, with unemployment above 7 percent. The nation was in full crisis.
The crisis would end, and most economists give credit for ending it to Paul Volcker, the chair of the Federal Reserve. Volcker got inflation under control through the economic equivalent of chemotherapy: He engineered two massive, but brief, recessions, to slash spending and force inflation down. By the end of the 1980s, inflation was ebbing and the economy was booming.
The 2022 inflation is not as bad as the inflation of 1978-1982 — but it’s the worst inflation the US has experienced in decades. The Federal Reserve is, accordingly, raising interest rates aggressively, as Volcker did. It’s not trying to engineer a recession, but its actions could cause one as an unintended consequence. And if inflation continues to be a major problem, demands for an even more aggressive Volcker-style response will grow.
A rerun of the Volcker shock or something like it is a real possibility, if not a likelihood. Which makes understanding what the first one entailed”
“Several factors have pushed gas prices down, including a drop in oil prices as recession fears grow and a smaller-than-expected impact from Western sanctions on Russia. Supply has also improved relative to demand, which has slightly fallen in recent weeks and remains at levels lower than a year ago, according to data from the US Energy Information Administration.”
“the cost of sending goods across the Pacific is still more expensive than it was before the pandemic. This price surge is a product of not only the delays and bottlenecks in the supply chain created by Covid-19 but also the huge increase in demand for consumer goods that followed. This demand was far greater than what shipping companies or American ports could handle. As a result, the price of shipping went up, creating increases in costs for importers and retailers within the United States. Those costs have now been passed on to consumers, which is partly why many everyday items are more expensive lately. (Surging gas prices, the war in Ukraine, and pandemic-era financial policies may also be driving inflation.)
Experts told Recode it’s unlikely that Biden’s crackdown on the shipping industry will significantly reduce the cost of products, even if it will make some meaningful improvements to operations at America’s ports. The small group of companies that dominate the shipping industry remain extremely powerful: They still benefit from longtime exemptions from antitrust laws and continue to wield enormous power.
The situation serves as a reminder that, while specific segments like the ocean shipping industry can play a massive role in influencing the prices of everyday goods, they’re also participating in the much larger economic system of supply and demand. This system involves everyone from the companies that build ocean vessels that shipping companies use to parents desperately trying to buy Barbie Dreamhouses for their kids. This complexity can make price increases extremely hard to rein in, even if you’re the president.”
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“Factories, understandably, closed because of Covid-19, and that created manufacturing delays, threw schedules off course, and ultimately led to shortages of all sorts of products. The pandemic also meant that people spent more time at home, stopped buying services, and cut back on travel. As a result, they started to spend a lot more on consumer goods, goods that typically needed to be shipped to the US from abroad, primarily from countries in Asia. Shipping became harder to provide and much more in demand — which sent shipping prices skyrocketing.
Now these shipping companies are facing a lot more scrutiny as well as growing concern that they’ve used their longtime antitrust immunity to profit during a crisis. Before the pandemic, these carriers had an average operating margin of just under 4 percent, but during the third quarter of last year, that margin grew to more than 50 percent. This has made importing goods in the US much more expensive: At the end of June, it costs nearly $7,600 to rent a 40-foot shipping container traveling across the Pacific compared to about $1,300 in early 2020, according to one shipping industry index.
“Today, the top nine companies control 85 percent of the trade. Go back 15 years ago, the top 10 companies controlled 50 percent of the trade. They basically ran companies out of business and bottom up,” Sal Mercogliano, a maritime history professor at Campbell University, said. “They were in a pretty vicious rate war, and then all of a sudden Covid happens and rates go through the roof.””
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“Enter the Ocean Shipping Reform Act, which the president claims will lower costs and help fight inflation. The law, which was signed by Biden in June, empowers the Federal Maritime Commission, the agency that regulates shipping into the US, to investigate carriers’ practices and help craft new rules. The government will also create a more formalized way to track chassis, the metal frames that are used to carry shipping containers at the ports, and expand the commission’s powers when the ports are extremely congested. Finally, the law targets the increasingly common practice of ocean carriers transporting empty containers back across the Pacific instead of waiting to fill their cargo with American exports, including agricultural products that American farmers have sold to customers in Asia.”
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“The global supply chain is made up of many different countries, companies, and people, which means that the price of a single good is influenced by myriad factors that are incredibly hard to control. That means that, for now, you shouldn’t expect Joe Biden’s mounting effort to regulate the shipping industry to have an immediate impact on the price of the stuff you buy.
In reality, the best way to lower the cost of shipping is for people to stop buying so many things that need to be shipped. Given that the economy doesn’t seem to be in a great place right now, that just might happen sooner rather than later. For what it’s worth, imports to the US seem to be declining, and American consumers appear to be returning to their pre-Covid spending habits.”
How Much Of The Gasoline Price Surge Is President Biden’s Fault? Robert Rapier. 2022 3 13. Forbes. https://www.forbes.com/sites/rrapier/2022/03/13/how-much-of-the-gasoline-price-surge-is-president-bidens-fault/?sh=31618bce7c8b 4 reasons high gas prices aren’t Joe Biden’s fault—and one critical way he’s adding to the problem Will Daniel. 2022 6 8. Fortune. https://www.yahoo.com/video/4-reasons-high-gas-prices-090000545.html