Inside this Issue:
- Not Enough Stuff: America’s Supply Side Slide
- Chips Ahoy: Intel Betting Billions
- Labor? Housing? Dollar? Debt? Leading Economists Gather to Discuss
- GameStop: Back to Business After Wall Street Madness
- Ethereum Delirium: The Latest Blockchain Boom
- Brother, Can You Spare a Dollar? Economist Dan Awrey on Eurodollar Doldrums
- Mexico: Nation with Inflation?
- America’s First Tycoon: The Life and Legacy of Cornelius Vanderbilt
- Debate: Walmart vs. Amazon, Battle of the Retail Titans
- And This Week’s Featured Place: Puerto Rico, Crisis After Crisis
Quote of the Week
“I think that is something that maybe people don’t marvel at enough: The idea that we did not even dream that we could have a vaccine this quickly, and here we are vaccinating millions of people every day… It’s just amazing.”
-New York Times science and health reporter Apoorva Mandavilli
America has a supply problem. Not enough houses. Not enough microchips, which means not enough cars. Not enough home appliances. Not enough skilled workers. Not enough seaport capacity. Not enough raw materials like lumber. And soon, maybe not enough oil, with that humungous container ship holding up traffic in Egypt. Funny how a year ago, the big worry was oversupply, amid what looked to be a severe recession.
The recession, alas, was severe but short, followed by a voracious revival in demand, for goods anyway, if not services. One thing certainty not in short supply during the past year: fiscal and monetary support from Uncle Sam. So here we are, heading into the second quarter of 2021 with galloping demand and constrained supply. Sounds like a recipe for rising prices.
Rising prices? Yes, but not yet entrenched inflation, the economy’s great fear since the scarring experience of the 1970s. That sort of inflation is more a state of mind than anything else. People start believing prices will increase tomorrow, so they rush to make purchases today. And they insist on higher wages. That leads to even higher prices—a wage-price spiral. Suddenly, companies find planning and investing for the future a whole lot more complicated.