Economic experts pushed back on the Biden administration’s claim that widespread supply chain issues in the U.S. were the result of its successful economic agenda.
“Demand is off the charts. Retail sales are through the roof,” Transportation Secretary Pete Buttigieg said during an interview Sunday. “And if you think about those images of ships, for example, waiting at anchor on the West Coast – every one of those ships is full of record amounts of goods that Americans are buying because demand is up because income is up because the president has successfully guided this economy out of the teeth of a terrifying recession.”
More than half of American adults said an item they recently shopped for was out of stock while 54% encountered the same issue online shopping, according to a Morning Consult survey published Friday. The problems facing the supply chain have been most apparent in California, where busy shipping ports have seen delays and cargo backlogs, The Wall Street Journal reported.
Buttigieg explained that the U.S. supply chain “can’t keep up” with surging demand for goods and services across the economy. Supply chain delays would continue into 2022, he added.
Supply chain issues have worsened in recent weeks, however, as the Biden administration has actively worked to resolve some of the shortfalls. President Joe Biden issued an executive order in February directing federal agencies to expand efforts “strengthening the resilience of critical supply chains” while Buttigieg and Vice President Kamala Harris convened a meeting on Oct. 13 with private and public sector officials to discuss potential remedies.
Economists, though, rejected both Buttigieg’s claim that supply chain issues were connected to the administration’s policies and that Biden’s economic policies have been successful to begin with.
“This isn’t the first time that we’ve had increases in our shipment activity,” Casey Mulligan, former White House Council of Economic Advisers chief economist and a University of Chicago professor, told the Daily Caller News Foundation in an interview.
“We had some really big increases before and the consumer didn’t notice because it wasn’t a screwed up system,” he continued.
During the Trump administration, the number of containers that passed through Los Angeles, the nation’s busiest port, hit multiple records, according to a city database. The number of annual containers peaked in 2018 when nearly 9.5 million were transported through Los Angeles.
An estimated 7.3 million containers by comparison have passed through the city’s port this year, the data showed. The Biden administration announced last week that it had worked with local officials to expand the port’s hours to 24 hours per day.
The largest U.S. ports may even see a decline in imports compared to 2020 because of massive congestion at docks, the National Retail Federation, which tracks national imports, said on Oct. 7.
“The net effect of President Biden’s policies has probably been to worsen the supply disruptions to a certain degree,” Brian Riedl, a senior fellow focusing on economic policy at the Manhattan Institute, told the DCNF. “And that was by shooting a $1.9 trillion stimulus bill at an economy that was only $420 billion below its potential performance.”
“That, combined with unemployment provisions that kept people not working, contributed to a degree of overheating in the economy that is driving a lot of the supply disruptions,” Riedl added.
In March, Biden signed the American Rescue Plan, which injected $1.9 trillion in additional coronavirus stimulus into the economy and extended pandemic-related unemployment benefits. Riedl said the stimulus boosted demand while unemployment benefits caused significant employment shortfalls.
Throughout the summer, the Biden administration defended the federal pandemic boost given to out-of-work Americans, even as the nation’s labor shortage worsened and job growth slowed. Businesses struggling to find workers amid the economic recovery and economists blamed the expanded benefit.
“The White House is going to emphasize the data that they want and they’re going to spin global supply disruptions as proof of having an economy of abundance,” Riedl continued. “But it certainly doesn’t feel like abundance for the people who can’t buy basic things off the shelves and are suffering from long lines and waits for items they need.”
Mulligan added that the administration’s reference to increasing retail sales as evidence of its successful economic policies was misleading because of the potential impact inflation may have on those figures. Consumer prices have surged to multi-decade highs over the last several months and are expected to continue their upward trajectory into 2022.
“When you see people spending more dollars, say at the grocery store, are they getting more groceries or are they getting the same groceries and paying more?” Mulligan said.
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