Supply and demand. I thought I’d learned that basic economic principle most pointedly from my Intro to Econ professor my junior year in college. I had put off taking the course as long as I could. Political Science majors may NEED to know about how the money supply and businesses work, but they often really prefer to just spend the public’s money with little regard for consequences.
Since I was an upperclassman, I was able to take the course on a Pass/Fail basis which greatly influenced my decision to attend the class. It seemed that minimal effort would be required to get that coveted “P” and no actual grade would count against my total average. Spoiler Alert: I passed, but let’s just say I wasn’t the star of the classroom.
How did I learn the basics of supply and demand so pointedly from my professor? Well, that came about because on one particularly warm day, I was trying my best to pay attention to his lecture, but that supply and demand concept sounded simple enough, so I wasn’t quite sure why he had to drone on and on about it.
Fortunately, as a great distraction, a rather large wasp came in through an open window and started flying lazily about the room. I was able to keep my eyes open by surreptitiously following the movements of the intruder. Now, one thing I need to do is pause to tell you that this particular professor liked to walk and talk when pontificating.
Well, the wasp-watching soon became almost as dull as a Maynard Keynes macroeconomic seminar. I finally succumbed to heavy eyelids and was pretty much sound asleep sitting straight up in my chair. Unbeknownest to me, however, the wasp had finally decided to alight . . . on the back of my chair. Also unbeknownest to me, the professor had traversed the entire room and was coming up my row from behind. I was later told by others that, without missing a syllable, he spied the wasp, picked up a book from a neighboring coed’s desk, and dispatched the offensive stinging creature with one very quick, very loud thwack.
I assure you I was wide awake the rest of the class. And that’s when I paid rapt attention to information about supply and demand.
I mention that story because it certainly seems to me as if economic professors across the fruited plain are celebrating now. Right in front of our noses every day we’re seeing the effects of supply and demand play out before us. For example: Have you tried to buy a car with your stimulus money as a down payment? Good luck. Dealers that usually stock hundreds of new vehicles now perhaps have just a few dozen. They’ve got the buyers (the demand), but not the autos themselves (the supply). It seems motor-building companies can’t get the electronic parts (or mechanical ones) they need.
How much did you pay for your eggs at the grocery store this week? Or any other food item for that matter. It costs a whole lot more to eat this year than it did last summer during the height of the pandemic. Of course, we WERE mostly subsisting on oatmeal and PB&J, but still, the checkout lane tab has grown considerably. Not to mention the cost of gas just to get you to the store. Granted, many of us are quite happy to be able to drive to the grocery, or anywhere else. But I read that the price of petrol is up over $1 a gallon vs. 2020.
Did you do a little DIY project while cooped up at home? Perhaps you noticed the price of lumber was up 1500% or so. I think it’s since dropped back down, but quite a few people may have additions on their houses that cost more than the home itself originally did.
According to reports, the list of shortages is pretty long and plays no favorites. Plastics, used cars, roof support joists, TP (again), vacation homes, furniture, chicken wings, bacon, hot dogs, cheese, coffee, olive oil, chlorine, corn, sporting goods, and oxygen, for crying out loud, to mention a few. And perhaps most notable, people themselves. Trucking companies can’t find drivers, and almost every storefront has a Help Wanted sign in the window.
Supposedly, normal supply chains will eventually return. But for now, the supply and demand driving our economy certainly has our collective attention. And professor, I just want you to know I got it . . . again . . . even without your wake-up call.