The economy and rising prices are front and center for voters. But understanding the forces driving these increases isn’t easy when public discourse is clouded by spin.
Here’s the truth: the high prices we’re experiencing now are not temporary. They are the lingering effect of “inflation past.” While gas and food prices may fluctuate with global events, most price hikes are here to stay. Let’s dive into why prices have soared over the past few years —and who’s responsible.
COVID-19: The catalyst for chaos
The COVID-19 pandemic was the initial blow that disrupted the global economy. Supply chains were shattered as lockdowns and safety measures forced businesses to shut down or operate with limited staff. This wasn’t just an American crisis. It was a worldwide breakdown.
But let’s be clear: COVID didn’t directly break the supply chain. People did. Or rather, the sudden absence of people. When workers can’t make, ship, or sell goods, the supply shrinks, driving up prices. Companies, sensing an opportunity, capitalized by raising prices further. We owe a debt of gratitude to the essential workers who kept critical services running, but the reality is that many industries used the crisis to their advantage.
A series of global disruptions
COVID-19 wasn’t the only hit to the economy. Consider the container ship Ever Given blocking the Suez Canal, droughts stalling traffic at the Panama Canal, and the war in Ukraine disrupting oil and wheat exports. These events added fuel to the inflationary fire, and no nation escaped the consequences.
The result? Consumers worldwide felt the pain as prices climbed higher than ever before.
Corporate power and market manipulation
While these disruptions were real, corporations didn’t hesitate to exploit the turmoil.
In many industries, a few powerful companies dominate the market. These near-monopolies used the chaos to jack up prices, knowing there would be little backlash. Take the meat industry, for example: Four corporations control over 50% of the market for beef, pork, and poultry. This lack of competition allows them to inflate prices at will—and limit workers’ options.
Tariffs: hidden taxes on consumers
Tariffs are another hidden cost to consumers. When politicians promote tariffs as a way to punish foreign nations, they often fail to mention who actually foots the bill: you.
China doesn’t pay these tariffs —you do. Tariffs are effectively taxes on imported goods, and they drive up the cost of everyday items like electronics, clothing, and food. If in doubt, look up the meaning of tariff.
Protective regulations: artificially high prices
Then there are protective regulations that keep prices unnecessarily high. Americans pay two to ten times more for prescription drugs than other countries because import restrictions limit competition. U.S. sugar costs nearly double the global average, forcing you to pay more for everything from candy to cereal. These policies are designed to protect domestic producers, but at the expense of the American consumer.
Inflation: a ghost of the past
It’s important to distinguish between inflation and high prices.
Inflation —the rate at which prices rise —has slowed, thanks in part to the Federal Reserve’s interest rate hikes. But the prices that have already gone up aren’t coming back down. Ignore the political ads.
A strong economy amid rising prices
Despite the higher prices, the economy remains robust. Wages are up, businesses are thriving, and the country continues to add jobs. The stock market is performing well, signaling confidence in economic growth. The last four years have been good for the economy by most measures.
To sum up…
The price jump had multiple causes. It was the consequence of a perfect storm of global events, corporate opportunism, and policy decisions. But despite the challenges, the economy is strong, and the future can be even brighter with the right leadership. We must vote with the economy in mind —not just to combat inflation but to ensure the continued growth and prosperity that we currently have.
Barry Dexter lives in the Unionville section of Farmington.